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properties. Under these circumstances, these items are allocable
evenly between petitioner and Mr. Rowe. Therefore, to the extent
petitioner lacked actual knowledge of these items, she will
qualify for relief from joint liability under section 6015(c) for
the portion of the item allocable to Mr. Rowe.17
2. Actual Knowledge
Respondent argues that petitioner had actual knowledge of
the erroneous mortgage interest deductions. In order to prove
actual knowledge in the context of an erroneous deduction,
respondent must show that petitioner had “actual knowledge of the
factual circumstances which made the item unallowable as a
deduction.” King v. Commissioner, 116 T.C. at 204.
i. 1987 Mortgage Interest
Respondent disallowed $12,169 of the claimed mortgage
interest deduction for 1987 on the basis of a lack of
substantiation. Thus, respondent must show that petitioner knew
or believed that the mortgage interest for 1987 was overstated by
$12,169. See id.
Respondent claims that petitioner had actual knowledge of
the existence and amount of the home mortgage interest payments
in 1987 because she wrote the checks to pay the mortgage
17Because petitioner cannot qualify for relief under sec.
6015(c) for the portions of items which are allocable to her, we
analyze her ability to qualify for relief for such portions in
our later discussion under sec. 6015(b) and (f). See infra pp.
53-61.
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