- 12 -
We disagree. In those cases, the taxpayers’ corporations
incurred expenses related to the corporations and not to the
taxpayers individually. We held that those taxpayers could not
deduct their corporations’ expenses. Here, the interest at issue
relates to petitioner individually. Petitioner bought the
nursing homes primarily to provide employment for himself and his
wife. He was personally liable to pay the interest. We conclude
that the interest expense is his and not that of the S
corporations. See Boseker v. Commissioner, supra; Schanhofer v.
Commissioner, supra. None of the cases that respondent cites
involves a taxpayer who borrowed money to buy a business to
provide his livelihood. We hold that petitioner may deduct the
interest that he paid in 1993 and 1994 for loans that he used to
acquire, renovate, and operate the nursing homes.
3. Interest Relating to the Sunbury Building and Heritage
Inn Partnerships
Petitioner contends that the interest that he paid on loans
used to acquire the Sunbury building and Heritage Inn
partnerships was trade or business interest because he was a
general partner of the partnerships and because Financial
Perspectives and the nursing homes had offices in the Sunbury
building. We disagree.
Petitioner did not buy interests in those partnerships to
provide employment for himself. The record is not clear about
the extent to which he participated in those partnerships. The
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011