Douglas and Carole Ritter - Page 3

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               Respondent determined a deficiency of $2,809 in petitioners’           
          1996 Federal income tax.  After concessions,2 the sole issue is             
          whether petitioner3 is entitled to an itemized deduction of                 
          $4,656 for investment interest paid on a loan to purchase silver            
          coins.  Petitioners resided in Lisle, New York, at the time the             
          petition was filed.                                                         
               The relevant facts may be summarized as follows.  Around               
          1990, petitioner began purchasing silver coins as an investment.            
          He borrowed money from the Wilmington Trust bank to finance the             
          purchases.  Wilmington Trust held the coins.  During 1996,                  
          petitioner paid Wilmington Trust $4,656 in interest on the loans            
          used to purchase the silver coins.  Petitioner received no income           
          from his investment in silver coins during 1996.  Petitioners               
          reported no income from dividends, interest, royalties, or                  
               Petitioners owned at least eight rental apartments in the              
          Binghamton, New York, area.  Petitioners reported net rental                

          2   Respondent concedes that petitioners are entitled to a sec.             
          179 deduction of $4,261.  Petitioners concede that their claimed            
          Schedule E (Supplemental Income and Loss) deduction of $10,160              
          for medical expenses is improper, and that only $6,434 was                  
          incurred for medical expenses deductible as allowed on Schedule A           
          (Itemized Deductions).                                                      
          3   Petitioner Carole Ritter did not appear at the trial or                 
          execute the stipulation of facts.  With respect to her, we                  
          dismiss this case for failure to prosecute.  See Rule 123(b).               
          The decision, when entered, will be in the same amount as                   
          determined against petitioner Douglas Ritter.  In the opinion,              
          references to petitioner are to Douglas Ritter.                             

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