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were liable to Lomas Mortgage for payment of the mortgage on the
Foxbriar property. Moreover, at least through May 1992,
petitioners paid no amounts to Lomas Mortgage; rather, from July
1990 through April 1992, petitioners were making lease payments
of $1,000 per month directly to the Hewitts. Thus, it cannot be
said that petitioners paid any interest on the Foxbriar property
at least through May 1992.
Petitioners contend that the $5,372 deducted on their 1991
return for mortgage interest represents one-half of the total
interest paid on the Foxbriar property for 1991. The record in
this case is unclear as to how petitioners determined the amount
of interest paid on the Foxbriar property for that year, and the
manner in which petitioners calculated that they were entitled to
a deduction for one-half of that amount. The record is explicit,
however, that petitioners paid no interest on the Foxbriar
property during 1991. The record shows that, during 1991,
petitioners paid nothing more than lease payments (and earnest
money payments) directly to the Hewitts in connection with the
Foxbriar property.10 Whether or not the Hewitts used the monthly
lease payments from petitioners to make mortgage payments on the
Foxbriar property is of no consequence in this case. The Federal
10 It is notable that, on Schedule A of their 1991 return,
petitioners reported that the $5,372 in mortgage interest for
which they claimed a deduction was paid to Peggy L. Hewitt of
Tacoma, Washington.
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