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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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