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barn, a maintenance shed, and a larger building. A sign on the
road indicated that the lot was the Lake Gentry Horse Farm. On
the adjoining lot, petitioners constructed a new residence. From
May 1987 until late 1988, petitioners temporarily resided at
property known as Acorn Court while their new home was being
constructed. In the summer of 1988, petitioners moved into their
new residence. The total cost for the Albritton property and the
new residence exceeded $1 million. The residence was jointly
titled in the names of petitioner and Mr. Rowe.
On the Schedule A, Itemized Deductions, attached to their
1987 return, petitioners claimed a home mortgage interest
deduction of $62,545. Petitioners substantiated $50,376 of this
amount. Respondent disallowed the remaining $12,169 of the
claimed deduction on the basis of a lack of substantiation.
On the Schedule A attached to their 1988 return, petitioners
claimed a home mortgage interest deduction of $97,341. On the
attached Schedule A, the notation “84,186 + 13,155" appears next
to the figure $97,341. The Schedule E, Supplemental Income
Schedule, attached to the return lists $13,155 as mortgage
interest paid on rental property identified as “Bayview House”.
Petitioners substantiated $84,186 of the amount claimed for the
home mortgage interest deduction. The remaining $13,155 of the
home mortgage interest deduction was
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