John A. Malone and Brenda K. Malone - Page 14

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               Interest paid on indebtedness allocable to a trade or                  
          business (other than the trade or business of performing services           
          as an employee) is not personal interest.  Sec. 163(h)(2)(A).               
          Investment interest is not personal interest, sec. 163(h)(2)(B);            
          however, investment interest may be deducted only to the extent             
          of the taxpayer's net investment income, sec. 163(d).                       
               Petitioners contend that the interest at issue is allocable            
          to a trade or business, and that it was not the trade or business           
          of performing services as employees.  Alternatively, petitioners            
          contend that they may deduct the interest at issue as investment            
          interest under section 163(h)(2)(B).  We agree that the interest            
          at issue is investment interest.  However, we disagree that                 
          petitioners may deduct it because they have not shown that they             
          had any investment income during the years at issue.                        
               2.   Whether the Interest at Issue Is Allocable to an                  
                    Investment or to a Trade or Business                              
               Petitioners contend that the interest at issue is allocable            
          to the trade or business of owning and operating Seattle Pump.              
          Petitioner testified that he bought the stock to get a job for              
          himself and his family and that he believed he was not making an            
          investment when he bought the stock.                                        
               Petitioners contend that Miller v. Commissioner, 70 T.C. 448           
          (1978), supports their position that the purchase of stock in a             
          company to obtain a job is in connection with a trade or                    
          business.  We disagree.  In Miller v. Commissioner, supra, the              




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