National Industrial Investors, Inc. - Page 12

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            Francisco Federal mortgage interest expense for 1989 and 1990.                             
            See Ashburn v. United States, 740 F.2d 843, 850 (11th Cir. 1984);                          
            Brice v. Commissioner, T.C. Memo. 1990-355, affd. without                                  
            published opinion 940 F.2d 667 (9th Cir. 1991); R.C. Lindsey                               
            Plumbing, Inc. v. Commissioner, T.C. Memo. 1988-73; Rouffy v.                              
            Commissioner, T.C. Memo. 1987-5.                                                           
                 At trial, respondent continued to dispute whether interest                           
            on another obligation secured by the Burke property, namely, the                           
            McMahon note, was currently deductible, arguing that the "all                              
            events" test had not been satisfied.  See United States v.                                 
            General Dynamics Corp., 481 U.S. 239 (1987); Guardian Inv. Corp.                           
            v. Phinney, 253 F.2d 326, 331 (5th Cir. 1958).  The McMahon note                           
            provided for 7-percent interest compounded annually starting on                            
            January 1, 1988, with any unpaid principal and interest due and                            
            payable on December 31, 1997.  The terms of the McMahon note                               
            required no payment until December 31, 1997, the day before the                            
            termination of the Burke lease.  If the Burke property were sold,                          
            however, the note would become immediately due and payable.                                
            Respondent argued that the interest expense on the McMahon note                            
            was not allowable since the payment of the principal was                                   
            contingent and dependent on the disposition of the Burke property                          
            and the note was subordinated to another obligation.  Id. at 331.                          
                  Although we found respondent's logic on this issue "less                             
            than compelling" at trial, that does not mean that her position                            




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