Andrew E. Blanche, Jr., and Cynthia D. Blanche - Page 23




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          holds that petitioners held no legal or equitable title to the              
          Foxbriar property prior to August 1992.                                     
               Petitioners’ lack of any legal or equitable ownership                  
          interest in the Foxbriar property prior to August 1992 precludes            
          their entitlement to a deduction for qualified residence interest           
          under section 163(a) during this time.  As stated previously,               
          section 1.163-1(b), Income Tax Regs., requires that the taxpayer            
          be the "legal or equitable owner" of the property.                          
               That same rationale applies to the real estate property                
          taxes.  Real property taxes are generally deductible in the                 
          taxable year within which they are paid or accrued.  See sec.               
          164(a)(1).  However, no deduction is allowed to the extent that             
          real property taxes are treated as imposed on another taxpayer.             
          See sec. 164(c)(2); sec. 1.164-1(a), Income Tax Regs.; Loria v.             
          Commissioner, T.C. Memo. 1995-420.                                          
               As stated earlier, petitioners held no legal or equitable              
          title to the Foxbriar property prior to August 1992.  Moreover,             
          there is no evidence in the record to suggest that the real                 
          property taxes at issue were paid by or imposed on anyone other             
          than the Hewitts through August 1992.12                                     


               12   In the notice of deficiency, respondent allowed                   
          petitioners a deduction for real property taxes paid by                     
          petitioners in connection with the Foxbriar property from Aug.              
          through Dec. 1992.  However, since the amount of such allowed               
          property tax deduction, coupled with the other allowed itemized             
          deductions for 1992, failed to exceed the standard deduction,               
          petitioners were allowed the standard deduction for that year.              





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