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disallowed by respondent because it was a duplicate deduction of
interest paid on the Bayview House.16
On the Schedule A attached to their 1990 return,
petitioners’ claimed a home mortgage interest deduction of
$122,526. Additionally, an interest expense of $60,564 was
listed on the Schedule F, Farm Income and Expenses, attached to
the return. In the notice of deficiency for 1990, respondent
allowed a mortgage interest deduction of $66,105 and disallowed
the remaining $56,421 claimed on the Schedule A. The notice of
deficiency provided the following explanation:
(h)(I) It is determined that the Schedule A Itemized Deductions
claimed on the 1990 return for Interest Expense is only allowable
to the extent of $66,105.00. Since you claimed $122,526.00, your
taxable income is increased in the amount of $56,421.00 as shown
below:
16In the notice of deficiency for the years 1987, 1988, and
1989, respondent provided the following explanation:
1.f.II. It is determined that $13,155 of home
mortgage interest expense claimed on Schedule
A in the 1988 tax year is disallowed because
this amount relates to one of your rental
properties and has already been deducted on
Schedule E. Thus, this mortgage interest
must be disallowed from Schedule A to prevent
it from being deducted twice.
Accordingly, your taxable income for the 1988
tax year is increased by $13,155.
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