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interprets personal interest to include interest paid on
individual tax deficiencies.
Section 163(h) generally provides:
SEC. 163. INTEREST.
* * * * * * *
(h) Disallowance of Deduction for Personal
Interest.--
(1) In general.–-In the case of a taxpayer
other than a corporation, no deduction shall be
allowed under this chapter for personal interest
paid or accrued during the taxable year.
(2) Personal interest.–-For purposes of this
subsection, the term “personal interest” means any
interest allowable as a deduction under this
chapter other than–-
(A) interest paid or accrued on
indebtedness properly allocable to a trade or
business (other than the trade or business of
performing services as an employee) * * *
Section 1.163-9T(b)(2)(i)(A), Temporary Income Tax Regs., supra,
provides:
Section 1.163-9T. Personal interest (temporary).--
* * * * * * *
(b) Personal interest–-
* * * * * * *
(2) Interest relating to taxes–-(i) In
general. Except as provided in paragraph (b)(2)(iii)
of this section, personal interest includes interest–-
(A) Paid on underpayments of individual
Federal, State or local income taxes and on
indebtedness used to pay such taxes (within the meaning
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