Eli T. Sleiman, Jr. and Janie L. Sleiman, et al. - Page 23

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               The intangible personal property tax is levied against                 
          notes, bonds, and other obligations for the payment of money                
          which are secured by a mortgage, deed of trust, or other lien               
          upon real property situated in the State of Florida.  Fla. Stat.            
          ch. 199.133(1) (1989).  The documentary stamp tax is levied on              
          mortgages, trust deeds, or other evidences of indebtedness filed            
          or recorded in the State of Florida.  Fla. Stat. ch. 201.08(1)              
          (1989).                                                                     
               In the statutory notices of deficiency, respondent                     
          disallowed REE's and ME's claimed deductions for taxes on the               
          ground that the taxes constituted capital expenditures.                     
               Section 164(a) provides:                                               
               SEC. 164.  TAXES.                                                      
                    (a)  General Rule.--Except as otherwise provided in               
               this section, the following taxes shall be allowed as a                
               deduction for the taxable year within which paid or accrued:           
                    (1)  State and local, and foreign, real property taxes.           
                    (2)  State and local personal property taxes.                     
                    (3)  State and local, and foreign, income, war profits,           
               and excess profits taxes.                                              
                    (4)  The GST tax imposed on income distributions.                 
                    (5)  The environmental tax imposed by section 59A.                
               In addition, there shall be allowed as a deduction State and           
               local, and foreign, taxes not described in the preceding               
               sentence which are paid or accrued within the taxable year             
               in carrying on a trade or business or an activity described            
               in section 212 (relating to expenses for production of                 
               income).  Notwithstanding the preceding sentence, any tax              
               (not described in the first sentence of this subsection)               
               which is paid or accrued by the taxpayer in connection with            




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