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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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