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this argument because she calculated that the principal balance
of petitioner's borrowings was something less than the $1,800,000
he ultimately paid to the bank. Respondent therefore concluded
that the remaining balance of petitioner's payment represented
interest accrued by the bank. Specifically, respondent deter-
mined that $1,386,761 of petitioner's $1,800,000 payment to the
bank constituted payment of principal, and $413,239 related to
interest. Respondent calculated the principal balance by tracing
payments through the bank's "Loan Commitment" sheets to determine
how the funds were actually disbursed. This analysis was
detailed, credible, and persuasive.
Petitioner relies on "Interest Paid" statements he received
from the bank to support his contention that more than $413,239
of the $1,800,000 payment to the bank related to interest.
Included in these statements was a $71,321.97 amount of interest
"paid" for 1990. However, a bank "Charge Off Authorization" form
indicates that the $71,321.97 amount was actually written off by
the bank. Therefore, the Court finds that the bank's "Interest
Paid" statements do not reflect interest actually "paid" by
petitioner. Petitioner failed to introduce any other evidence at
trial concerning the principal balance on the notes or the
interest paid to the bank. Accordingly, we sustain respondent's
11(...continued)
only of the interest expense the Court determines has been "paid"
in 1990 but not deducted by petitioner due to sec. 163(d)
limitations.
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