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sales using the installment method, and there is no dispute
concerning the amount of interest that petitioner was required to
pay under section 453(l)(3).
Petitioners do not deny that the business of selling
timeshares was conducted by Aqua Sun, and not by petitioner.
They say in their opening brief that the section 453(l)(3)(C)
interest paid by petitioner arises out of, and relates directly
and exclusively to, the taxes imposed on petitioners as a result
of the trade or business activities of Aqua Sun. They thus
appear to be arguing that Aqua Sun's trade or business is to be
imputed to petitioner. Having made this connection, petitioners
go on to argue that the interest that petitioner paid falls
within the personal interest exception contained in section
163(h)(2)(A). That section provides that "personal interest"
does not include "interest paid or accrued on indebtedness
properly allocable to a trade or business (other than the trade
or business of performing services as an employee)."
Petitioners must get over one more hurdle in order to
prevail; namely, the provisions of section 1.163-9T(b)(2)(i)(B),
Temporary Income Tax Regs., 52 Fed. Reg. 48409 (Dec. 22, 1987).
This section of the temporary regulations provides that personal
interest includes interest paid under what was formerly section
453C(e)(4)(B) and is now section 453(l)(3)(C); i.e., interest
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