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section 1034(a);1 (2) whether petitioner is entitled to an
interest deduction in excess of that allowed by respondent; and
(3) whether petitioner is liable for the accuracy-related penalty
under section 6662(a) for a substantial understatement of his tax
liability.
FINDINGS OF FACT2
Petitioner resided in Fairfield, California, at the time his
petition was filed.
During 1989, petitioner decided to sell his principal
residence in Richmond, California, with the intention of
purchasing a new home in the area. In April 1989, prior to
selling his Richmond home, petitioner engaged the services of a
real estate agent to assist him in finding and purchasing a new
home. Shortly thereafter, petitioner located a home he wanted to
purchase and applied to a mortgage financing company for a loan.
Petitioner's loan application was denied, however, because he had
filed for bankruptcy in 1988 and his obligations in that regard
had not yet been resolved. At the time petitioner applied for
the loan, he was making payments of approximately $580 per month
pursuant to a debt repayment plan established in accordance with
his bankruptcy case.
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2 The parties have stipulated facts and exhibits which are
incorporated by this reference.
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