Married Taxpayer Filing Separately Not Entitled to Full Deduction

Married Taxpayer Filing Separately Not Entitled to Full Deduction of $1.1 Million for Mortgage Interest.

A taxpayer who elects married filing separately is limited to a deduction for interest paid on $500,000 of home-acquisition indebtedness plus interest paid on $50,000 of home-equity indebtedness, the Tax Court has ruled (Bronstein v. Commissioner, Dec. 59,060, 138 TC No. 21).

The Tax Court found that the statutory language on acquisition indebtedness and home-equity indebtedness is clear on its face. A married individual filing a separate return is limited to a deduction for interest paid on $500,000 of home-acquisition indebtedness. Likewise, a married individual filing a separate return is limited to a deduction for interest paid on $50,000 of home-equity indebtedness. The taxpayer offered no evidence to override this language and have the $1 million and $100,000 limits apply to the returns of married taxpayers filing separately.

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