119 T.C. No. 4
UNITED STATES TAX COURT
EDWARD A. ROBINSON III AND DIANA R. ROBINSON, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9574-99. Filed September 5, 2002.
P-H operated a law practice as a sole proprietorship at
all relevant times. R audited Ps’ 1987 joint tax return and
made several adjustments to the Schedules A and C attached
to this tax return. Ps agreed to R’s adjustments and the
resulting deficiencies and additions to tax. In 1994, R
seized real property that Ps owned; in 1995, R sold the
property and applied the proceeds to Ps’ underpayment of
their 1987 income tax liability and interest thereon. On
Schedule C of their 1995 joint tax return, Ps deducted the
1987 underpayment interest that had been thus paid.
1. Held: Insofar as sec. 1.163-8T, Temporary Income Tax
Regs., 52 Fed. Reg. 24999 (July 2, 1987), and sec. 1.163-
9T(b)(2)(i)(A), Temporary Income Tax Regs., 52 Fed. Reg.
48409 (Dec. 22, 1987), apply under the circumstances herein
to characterize the 1987 underpayment interest thus paid in
1995 as not being “interest * * * on indebtedness properly
allocable to a trade or business” within the meaning of sec.
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