Saffet and Ana Uslu - Page 10

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          property and the performance by petitioners of all of the                   
          obligations under the Alisal property mortgage are sufficient to            
          render petitioners' obligation to pay off the mortgage, an                  
          enforceable debt, to Haluk and Aysun for the amount of the                  
          mortgage at the interest rate specified in the mortgage.  See               
          Amundson v. Commissioner, T.C. Memo. 1990-337; Belden v.                    
          Commissioner, T.C. Memo. 1995-360.  On this record, the Court               
          finds that the mortgage payments made by petitioners to Southern            
          California Federal with respect to the Alisal property were, in             
          effect, payments of principal and interest to Haluk and Aysun.              
          See id.  In other words, the payments by petitioners constituted            
          payments on an indebtedness of petitioners.                                 
               To be sure, as required by section 1.163-1(b), Income Tax              
          Regs., the taxpayer must be the "legal or equitable owner" of the           
          property.  Where the taxpayer has not established legal,                    
          equitable, or beneficial ownership of mortgaged property, this              
          Court has disallowed the taxpayer a deduction for the mortgage              
          interest.  See Bonkowski v. Commissioner, T.C. Memo. 1970-340,              
          affd. 458 F.2d 709 (7th Cir. 1972); Song v. Commissioner, supra.            
               Legal title to the Alisal property was held in the names of            
          Haluk and Aysun during 1992.  Nevertheless, since the time of the           
          purchase of the Alisal property, petitioners have made each and             
          every mortgage payment on the property and have paid all expenses           
          for repairs, maintenance, and improvement in connection with such           

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