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the capital gain resulting from the April 1992 sale of this
property.
B. Mortgage Interest Deductions
Section 163 allows a deduction for certain qualified
interest. No deduction is generally allowed for personal
interest. See sec. 163(h). As an exception to this rule, a
deduction is allowable for certain interest paid with respect of
a “qualified residence”. See sec. 163(h)(3). For this purpose,
“qualified residence” means generally the taxpayer’s principal
residence and one other dwelling unit that the taxpayer selects
and uses for personal purposes for a specified number of days
during the taxable year. See secs. 163(h)(4), 280A(d). The
determination as to whether any property is a qualified residence
is made as of the time the interest is accrued. See sec.
163(h)(3).
We have concluded that petitioners sold the Danville
property to Haq in April 1992. There is no evidence in the
record that petitioners used the Danville property as a residence
after that date. Accordingly, we sustain respondent’s
disallowance of $17,000 of mortgage interest deductions
attributable to the period after April 1992.8
8 While it seems questionable that only about half of the
total interest payments for 1992 would be attributable to
interest payments made during the last two thirds of the year, we
note that any error in this regard appears to be in petitioners’
favor, and we do not undertake to recompute the amount of
respondent’s disallowance.
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