- 5 -
subtracted from that amount $1,295.50 of "prepaid interest" and,
thereby, exhibited a net figure of $15,600.83 in 1991 interest
payments made by petitioner during 1991. The following statement
was printed in bold type at the bottom of the Form 1098, "1991
Net Interest Payments Reported to IRS ********** 15,600.83".
This statement is not ambiguous. Petitioner failed to show that,
during 1991, he made any deductible payments of home mortgage
interest in excess of $15,6003 and, therefore, failed to prove
that he (as a cash basis taxpayer) is entitled to a deduction for
mortgage interest in excess of the amount shown on the Form 1098;
3 Respondent introduced into evidence copies of petitioner's
Forms 1098 from Gulf States for both 1991 and 1992. The Form
1098 for 1992 reflects "Net Prepaid Interest - Prior Year" in the
amount of $1,295.50, which was included in the "Net Interest
Payments Reported to IRS" for 1992; i.e., the amount that was
deductible for 1992. The Form 1098 for 1991 reflects "Net
Prepaid Interest - Current Year" in the amount of $1,295.50,
which was deducted from the "Net Interest Payments Reported to
IRS" for 1991 (i.e., not deductible). The Court concludes from
these two forms that the $1,295.50 figure represents interest
applicable to the 1992 year that petitioner "prepaid" during the
1991 tax year. Sec. 461(g) provides that, if a cash method
taxpayer pays interest that is "properly allocable to any period
* * * which is after the close of the taxable year in which
paid", such interest shall be treated as paid in the period to
which such interest is allocable. Sec. 461(g)(2) provides an
exception to this treatment for the payment of "points" in
connection with the taxpayer's principal residence. However,
petitioner presented no evidence to show that he had paid
"points" that would entitle him to an interest deduction in the
year of payment.
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