The acquisition of the aspectual difference between the preterit and imperfect in the past tense and the acquisition of the contrast between subjunctive and indicative mood are classic problem areas in second language (L2) acquisition of Spanish by English-speaking learners (Collentine, 1995, 1998, 2003; Salaberry, 1999; Slabakova & Montrul, 2002; Terrell, Baycroft & Perrone, 1987). Similarly, Spanish heritage speakers in the U.S exhibit simplification of the preterit/imperfect contrast and incomplete acquisition/attrition of subjunctive morphology (Merino, 1983; Montrul, 2002, 2007; Potowski, Jegerski & Morgan-Short, 2009; Silva-Corvalan, 1994). This raises the question of whether the linguistic knowledge of a developing L2 learner is similar to incomplete L1 acquisition in heritage language (HL) learners. Because heritage speakers are exposed to the heritage language from infancy whereas L2 learners begin exposure much later, Au et al. (2002, 2008) have claimed that heritage speakers are linguistically superior to L2 learners only in phonology but not in morphosyntax. The present study reexamines this claim by focusing on the interpretation of tense, aspect and mood (TAM) morphology in 60 instructed HL learners and 60 L2 learners ranging from low to advanced proficiency in Spanish. Results of four written tasks showed differences between the groups both in tense and aspect and in mood morphology, depending on proficiency levels. Implications of these findings for heritage language instruction are discussed. (Contains 6 notes, 4 tables, and 12 figures.)