- 15 -
Loan Origination Fees and Mortgage Interest in 1989 and 1990
The Dickersons contend that they are entitled to a deduction
of $2,199 for loan origination fees incurred to purchase the
Green Ridge residence in 1989. Additionally, the Dickersons
argue that they are entitled to deductions for mortgage interest
of $4,012 and $8,779 for the years 1989 and 1990, respectively.
Respondent contends that they are not entitled to these
deductions because they were not made on a qualified residence
within the meaning of section 163(h)(2)(D). Section 163(h)(2)(D)
allows a deduction for any qualified residence interest. Section
163(h)(3)(A) provides, inter alia, that qualified residence
interest includes acquisition indebtedness with respect to any
qualified residence of the taxpayer. A qualified residence
includes the principal residence of the taxpayer as well as one
other residence which is used by the taxpayer as a residence.
Sec. 163(h)(4)(A). This includes use by a family member,
including a grandson. Secs. 280A(d)(2)(A), 267(c)(4). Michoff,
Jr., the Dickerson's grandson, lived in the Green Ridge residence
during 1989 except for the months the residence was rented to the
Barretts. The Green Ridge residence therefore qualifies as a
qualified residence during 1989. Because the residence was used
by a family member for the requisite number of days during the
year, the Dickersons have established that they are entitled to
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011