Allie Ray McCullen and Shurley G. McCullen - Page 21

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          case is more like Miller v. Commissioner, 70 T.C. 448 (1978),               
          where we held that a taxpayer who borrowed money to buy a                   
          controlling interest in the stock of a bank so that he could                
          become the bank's president held the stock as an investment.                
               We conclude that petitioners bought and held the New-East              
          Bank stock as an investment, and that the interest on the loans             
          was not properly allocable to a trade or business.  Thus, the               
          interest on the $100,000 loan from South Carolina National Bank             
          is investment interest and is not trade or business interest                
          under section 163(h)(2)(A).                                                 
          E.   Amount of Interest Paid to First Hanover Bank                          
               Respondent contends that petitioners paid $5,443 in interest           
          to First Hanover Bank in 1990 because that is the amount shown in           
          petitioner's ledgers.4  Petitioners contend they paid $8,126                
          because that is the amount First Hanover Bank reported in the               
          Form 1098, Mortgage Interest Statement, it sent to petitioners              
          for 1990.  We agree with petitioners because we think the Form              
          1098 issued by First Hanover Bank is more reliable than                     
          petitioner's ledger sheets.                                                 
               Respondent points out that petitioner testified that either            
          he or his corporation paid the interest to First Hanover Bank and           

               3(...continued)                                                        
          whether the interest at issue was limited by sec. 163(d) in those           
          cases.                                                                      
               4 The ledger sheets show that petitioner paid First Hanover            
          Bank interest of $5,485.19.                                                 




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