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adjustments that were then being heard by the Court. Counsel for
respondent expressed no disagreement with that assertion.
Following the colloquy between counsel for the parties and the
Court, the trial resumed with respect to the remaining issues as
to which the parties were unable to agree: (1) Whether payment
of the subject expenses out of the Administration Co. special E
and Principal Services special accounts represented payment by
Kanter, and (2) whether the Kanters were entitled to a deduction
for mortgage interest payments made with respect to property (the
Kanters' personal residence) that was titled in a grantor trust
of which Kanter was the deemed owner.
Respondent also conceded that Kanter's Schedule C expenses
were ordinary and necessary to his business.
The Kanters claimed that the Schedule A and Schedule C
deductions and expenses disallowed by respondent for the years
1986 through 1989 were paid with Kanter's funds.
The Kanters are entitled to mortgage interest and real
estate taxes paid on their personal residence titled in Egondale
Trust, which was Kanter's grantor trust.
OPINION
On brief, respondent attempted to retract oral stipulations
made on the record that, for purposes of deciding respondent's
disallowed Schedule A and C deductions and expenses for the years
involved, this Court need only decide whether the funds used to
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