Ezel / IRS Rulings / 201017051

CCA 201017051: Equitable ownership may support a mortgage-interest deduction

Number
201017051
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Interest
Topics
Income and deductions
Code sections
§ 163, § 280A
Ruling dated
April 6, 2010
Publicly released
April 30, 2010
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel explained that a second residence generally means a residence used by the taxpayer and not rented out, citing Treas. Reg. § 1.163-10T(p)(3). The message also discussed the rules for use by family members and people with an equitable interest under IRC § 280A. It identified the parents’ equitable interest in the house as the key factual question and said that joint purchase, title, and liability on the debt could allow both parents to deduct the interest.

Ruling snapshot

  • Question: Can parents deduct mortgage interest when they jointly purchase and hold an equitable interest in a second residence?
  • Outcome: advice given
  • Key authorities: Treas. Reg. § 1.163-10T(p)(3); IRC § 280A(d)(2) and (d)(4)

Full text (IRS public release)

ID: CCA_2010040610031549 Number: 201017051
Release Date: 4/30/2010
Office: --------------
UILC: 163.00-00

From: -----------------
Sent: Tuesday, April 06, 2010 10:03:21 AM
To: -------------------------------------
Cc:
Subject: RE: Mortgage Interest

The cites I mentioned in my phone call were:
1.163-10T(p)(3)- states that a second residence means any residence in which the t/p uses as a residence and does not rent out. Also look at sec 280A(d)(4) and 280A(d)(2)- (d)(4) is use of the second residence by a family member qualifies as not renting out the second residence and (d)(2) states that use of second residence by someone with an equitable interest does not qualify as renting out the unit.

Our only concern here in NO is the equitable interest of the parents in the house. Did the ----------------------
---------- purchase the property jointly and are they both on the title and liable on the debt? If so, they could both deduct the interest. Whether someone is an equitable owner is a factual question. Hope this helps.
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