James A. Petrie IV - Page 10

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               Interest on a mortgage on real estate is deductible.  Sec.             
          163.  Where mortgaged property is jointly owned and the co-owners           
          are jointly liable on the mortgage each owner is entitled to a              
          deduction for the mortgage interest that he actually pays out of            
          his own funds.  Castaneda-Benitez v. Commissioner, T.C. Memo.               
               Section 6001 and the regulations promulgated thereunder                
          require a taxpayer to maintain adequate records to substantiate             
          the claimed deductions.  However, if certain claimed deductions             
          are not substantiated, we are permitted to estimate them when we            
          are convinced from the record that the taxpayer has incurred such           
          expense and we have a basis upon which to make an estimate.                 
          Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930); Vanicek v.               
          Commissioner, 85 T.C. 731, 743 (1985).                                      
               Petitioner testified that he paid $1,575 of mortgage                   
          interest expense on the Arizona rental property for 1990.                   
               For 1990, the record shows that petitioner's funds were used           
          to make the mortgage payments.  Further, the Temporary and Final            
          Orders required petitioner to continue to make the mortgage                 
          payments on the Arizona rental property of approximately $340 a             
          month.  We further note that Ms. Petrie assumed the outstanding             
          mortgage in 1992.  We are convinced from the record that there              
          was an outstanding mortgage on the Arizona rental property in               
          1990, and that petitioner made the mortgage payments.                       
          Accordingly, we find that petitioner is entitled to a mortgage              

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