- 27 -
See also Nat Harrison Associates, Inc. v. Commissioner, 42 T.C.
at 624-625. Interest withheld by a lender from loan proceeds is
nothing more than a promise to pay in the future and does not
constitute a payment for purposes of section 163(a). Menz v.
Commissioner, 80 T.C. at 1185-1186; Rubnitz v. Commissioner, 67
T.C. 621, 628 (1977); Cleaver v. Commissioner, supra at 454.
Based on the foregoing analysis, the interest deductions
claimed by White Tail on its 1980 return in the amounts of
$1,587,310.46 and $227,647.22 are not allowable, and we sustain
respondent's disallowance of the corresponding deductions that
petitioners claimed as their distributive share of partnership
loss.
Decision will be entered
under Rule 155.
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