On the horizon: Updated rules on the home mortgage interest deduction. In the IRS’s latest regulatory priority list, the agency announced its plans to open up a guidance project on this popular write-off. Among the thorny issues that practitioners would like to see addressed: In the context of a divorced couple, can a spouse who moves out of the home deduct mortgage interest he or she pays while the other spouse still lives in the home? Circumstances in which a taxpayer may be considered the equitable owner of a residence so that interest paid on another’s mortgage can be deducted. And whether one must both own the property and be liable on the debt to take the deduction, or if it’s OK to satisfy one of these.