- 240 -
and necessary business expense of petitioner. Accordingly, we
sustain respondent's determination on this issue.
K. Rental Loss and London Rent Expense
Again, our findings of fact are dispositive of respondent's
decreased rental loss of $35,228.13 claimed by petitioner for
1975, and the disallowance of $10,000 in 1976 for the rental of
the Khalatbaris' apartment in London. We sustain respondent's
determinations.
L. Loan Origination Fee
For the year 1978 respondent disallowed a deduction in the
amount of $7,000 paid as a loan origination fee. On May 25,
1978, petitioner paid W. Lyman Case and Company $7,000 as a loan
origination fee for the purchase of the Madison County Farm. The
Madison County Farm was not petitioner's personal residence.
Instead, it was a farm owned by CDC. Section 461(g) generally
requires that loan origination fees be charged to the capital
account and recovered over the period to which they are so
allocable. However, a loan origination fee is currently
deductible only if the loan is for the purchase of the taxpayer's
principal residence. Sec. 461(g)(2). Because the farm was owned
by CDC, rather than by petitioner, the deduction of the loan
origination fee is disallowed.
Page: Previous 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 NextLast modified: May 25, 2011