- 18 -
T.C. 105, 124 n.21 (1987). We may discount testimony which we
find to be unworthy of belief, Tokarski v. Commissioner, 87 T.C.
74, 77 (1986), but we may not arbitrarily disregard testimony
that is competent, relevant, and uncontradicted, Conti v.
Commissioner, 39 F.3d 658, 664 (6th Cir. 1994), affg. 99 T.C. 370
(1992) and T.C. Memo. 1992-616; Demkowicz v. Commissioner, 551
F.2d 929, 931-932 (3d Cir. 1977), revg. T.C. Memo. 1975-278;
Banks v. Commissioner, 322 F.2d 530, 537 (8th Cir. 1963), affg.
in part and remanding in part T.C. Memo. 1961-237; Loesch & Green
Constr. Co. v. Commissioner, 211 F.2d 210, 212 (6th Cir. 1954),
revg. and remanding a Memorandum Opinion of this Court dated
December 11, 1952. Respondent offered no evidence to contradict
petitioner's testimony. Petitioner's testimony was plausible,
and, we believe, truthful.
Respondent contends that petitioners have not proven how
much farm interest they paid because petitioner and his
corporation paid interest. We disagree. Petitioners have
conceded that they may not deduct interest that the corporation
paid. We accept petitioner's testimony that he paid the interest
at issue and that he used these loans for farming.
2. Conclusion
We conclude that, in addition to the $10,428 for 1990 which
respondent concedes, petitioners may deduct the following as farm
interest:
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