Edward A. Robinson III and Diana R. Robinson - Page 2




                                        - 2 -                                         
               163(h)(2)(A), I.R.C. 1986, and therefore as not being                  
               deductible under ch. 1, I.R.C. 1986, these regulations are             
               valid.                                                                 
                    2.  Held, further, Redlark v. Commissioner, 106 T.C. 31           
               (1996), revd. and remanded 141 F.3d 936 (9th Cir. 1998),               
               will no longer be followed.                                            
                    3.  Held, further, Ps are not entitled to deduct the              
               interest they paid in 1995 on account of the underpayment of           
               their 1987 income tax liability.                                       



               Charles B. Sklar1, for petitioners.                                    
               Joseph Ineich, for respondent.                                         


               CHABOT, Judge: Respondent determined a deficiency in Federal           
          individual income tax for 1995 against petitioners in the amount            
          of $29,879.2  The issue for decision is whether petitioners may             
          deduct for 1995 the interest they paid in 1995 on their 1987                
          Federal individual income tax underpayment.3                                


               1  Cheryl R. Frank and Gerald W. Kelly, Jr., appeared on               
          petitioners’ behalf at the trial.  A few months later, before               
          filing any briefs, they moved for leave to withdraw as counsel;             
          the Court granted their motion.  Later Charles B. Sklar entered             
          his appearance and thereafter represented petitioners on brief.             
               2  Of this total, $28,015 is income tax under ch. 1 and                
          $1,864 is self-employment tax under ch. 2.                                  
               Unless indicated otherwise, all section and chapter                    
          references are to sections and chapters of the Internal Revenue             
          Code of 1986 as in effect for 1995.  The section references in              
          table 1, infra, are to this Code as in effect for 1987.                     
               3  Respondent disallowed petitioners’ $69,617 deduction of             
                                                             (continued...)           





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