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that “other interest” includes the interest on the $1,000 car
lease, $10,000 that he used to retire an obligation, and $5,000
to establish a trust, all for what petitioner contends was for
the benefit of an architect who worked on the nursing homes.
2 On his 1994 Schedule C for Financial Perspectives, petitioner
reported paying mortgage interest of $19,689.65 to State Savings
Bank, $44,695.97 to County Savings, and $2,191.37 to Park
National Bank and other interest of $116,240.
5. Election Under Section 172(b)(3)
Petitioner claimed a $63,482 net operating loss on his 1994
return. He referred to a “Statement 01" on the return, but he
did not file it with the return. Petitioner faxed respondent a
“Form 1040 Supporting Statement 01" on January 9, 1996, which
stated that the claimed $63,482 loss was from carryovers of
$30,750 from 1993 and $32,732 from 1991.
Petitioner did not indicate on his 1991 or 1993 income tax
returns that he intended to forgo the then available 3-year net
operating loss carryback. See sec. 172(b)(3).
OPINION
A. Petitioner’s Interest Deduction
1. Whether Petitioner Had a Substantial Investment Intent
in Acquiring the Nursing Homes
Respondent contends that the interest at issue is not trade
or business interest because petitioner used the loans to buy,
renovate, and operate the nursing homes and that petitioner held
them as investments. We disagree.
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