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given to testimony concerning the business purpose of the claimed
expenses. See DeVenney v. Commissioner, 85 T.C. at 930; Boyle v.
Commissioner, T.C. Memo. 1995-74; Creske v. Commissioner, T.C.
Memo. 1990-318, affd. 946 F.2d 43 (7th Cir. 1991); Porter v.
Commissioner, T.C. Memo. 1986-465.
(2) Disallowed Current Interest Expenses
Petitioner argues that respondent unreasonably refused to
stipulate before trial the deductibility of interest on a
$475,000 San Franciso Federal Savings mortgage (the San Francisco
loan) on certain leased property (the Burke property). However,
petitioner's representatives did not complete and sign the
stipulation until December 3, 1994--3 days before trial.
Moreover, petitioner was dilatory in providing evidence to show
NII's complete debt obligations, providing some information on
the loans as late as November 1, 1994. Cf. DeVenney v.
Commissioner, 85 T.C. at 933, a case in which respondent was held
not to have unreasonably refused to concede an issue where
petitioners withheld crucial evidence in the form of witnesses
and their testimony. Respondent might have conceded the issue
many months prior to trial if petitioner had provided its records
when originally requested. See Currie v. Commissioner, T.C.
Memo. 1989-23. In light of such behavior, the Court holds that
respondent was substantially justified in waiting until her
opening argument to concede the deductibility of the San
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