Married Filing Separate Taxpayer Has Mortgage Interest Deductions Reduced

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A married taxpayer filing “married filing separate” took the mortgage interest deduction on a house purchased with a family member.  The court recognized that that Congress did not intend for “married filing separate” taxpayers to be able to take the full amount of the interest deductions allowable under Section 163.  The taxpayers deductions for mortgage interest and home equity debt were limited to $500,000 and $50,000.

Bronstein v. Commissioner, 138 TC No. 21, May 17, 2012