Charles H. Davison and Leslie B. Davison - Page 13

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               The purpose of John Hancock's $1,587,310.46 advance to White           
          Tail on December 30, 1980, was to provide White Tail with                   
          sufficient funds to satisfy the interest due John Hancock on                
          January 1, 1981.  Petitioners argue that White Tail paid this               
          interest when it made the wire transfer to John Hancock on                  
          December 31, 1980.  Respondent contends that interest has not               
          been paid but merely postponed, and, consequently, White Tail is            
          not entitled to a deduction under section 163(a).                           
               On brief, petitioners place particular reliance on prior               
          decisions of this Court in which the deductibility of interest              
          paid to a lender, with funds borrowed from the same lender, turns           
          on whether the borrower exercised "unrestricted control" over the           
          funds borrowed.  Petitioners argue that they are entitled to a              
          deduction pursuant to section 163(a), because White Tail                    
          possessed unrestricted control of the $1,587,310.46 wired from              
          John Hancock to White Tail's account at American National on                
          December 30, 1980.                                                          
               The concept of "unrestricted control" in cases of this                 
          nature had its origin in Burgess v. Commissioner, 8 T.C. 47                 
          (1947).  In Burgess, a cash basis taxpayer originally borrowed              
          $203,988.90.  On December 20, 1941, just prior to the due date of           
          his interest payment, the taxpayer borrowed an additional $4,000            
          from the same lender, deposited the lender's check in the                   
          taxpayer's checking account, and commingled the $4,000 with other           
          funds in the account.  On December 26, 1941, the taxpayer drew a            




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