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Substantiated Interest Expense
Household Finance $69,770
Farmers Bank and Trust 9,671
Home Savings of America 11,417
Central Fidelity 7,922
Allowable Interest Expense 98,780
Factor (33.1% for Schedule F & 66.9%
for Schedule A) x .669
Allowable Schedule A Itemized Deduction 166,105
Claimed on the 1990 Tax Return 122,526
Increase in Taxable Income 256,421
1We note that 98,780 x .669 yields a result of 66,083.82, not 66,105.
2After factoring in respondent’s previously mentioned mathematical
error, the actual increase in taxable income would be $56,442.18. Thus,
respondent’s mathematical error benefits petitioners.
B. Discussion
1. Allocation of Items
Petitioners’ 1987, 1988, and 1990 tax returns overstated
itemized deductions for home mortgage interest. Generally, this
personal deduction item is allocated evenly between individuals.
Sec. 6015(d)(3)(A); S. Rept. 105-174, supra at 57, 1998-3 C.B. at
593. Petitioner bears the burden of proving that a different
allocation is appropriate. Sec. 6015(c)(2); S. Rept. 105-174,
supra at 57, 1998-3 C.B. at 593.
During the years in issue, petitioners resided at Lots 22
and 27, Acorn Court, and the Albritton property. These
residences and the corresponding mortgages were in the joint
names of petitioner and Mr. Rowe. Petitioner testified that she
was aware that the residences were jointly titled, and she knew
that loans were acquired on these properties. Petitioner
acknowledged signing the loan and deed documents for the
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