Mortgage Interest Deductions for Unmarried Couples:

Some of you may remember my earlier blogs on mortgage interest deductions for same-sex couples. You can read one of the at

The general rule is that an unmarried individual can deduct interest on a mortgage debt so long as the debt qualifies as qualified mortgage indebtedness under Section 163 of the Internal Revenue Code. One requirement of Section 163 is this: to be qualified indebtedness, the mortgage cannot exceed $1.1 million dollars.

But here’s the problem. The Code is not at all clear about what this $1.1 million limitation means. It does say that if you are married filing separately, your deduction is limited to the interest paid on $550K of mortgage debt. Many of us who teach and practice tax law had for years assumed that this one of those instances under the tax code where unmarried couples (same sex or otherwise) were treated better than married couples. This limitation provision was enacted in 1987 and the IRS did not opine about how it applied to unmarried co-owners until 2009 (in a CCA which is not authority that binds the taxpayer).

OK – so IRS said the $1.1 M limit applied “per residence” and not “per taxpayer”  — and the IRS won on that theory in a litigated tax court case. I did not think that decision was defensible and so I encouraged the taxpayers to appeal, which they did (thank you very much).

Today the 9th Circuit Court of Appeals vindicated my reading of Section 163(h)(3) of the Internal Revenue Code – as well as the reading of all those wonderful tax professors around the country that agreed with my reading and signed an amicus brief in the case

Let me be clear: it is not a foregone conclusion that I, or any of the amici, think that the mortgage interest deduction is a good thing, or that it should discriminate against married couples. But there is a statute that authorizes the deduction and those of us on the yes team think it should be applied as it is written. The statute creates a limitation “per taxpayer” and not “per residence.”

Thanks to Emily Kingston (Sideman & Bancroft) for making the oral argument. Thanks to Aubrey Hone (Hone & Maxwell) for agreeing to take this case pro bono. And thanks to NCLR for enabling the tax prof amicus brief and for being a partner throughout.

The case is Voss v. Commissioner and it can be found at