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issue before us as the Joint Committee staff summary does, one
may reasonably view these two pieces of legislative history as
being consistent with one another. At the very least, in light
of the Joint Committee staff summary, and the validation of
section 1.163-9T(b)(2)(i)(A), Temporary Income Tax Regs., supra,
by five Courts of Appeals, an interpretation of the Joint
Statement of Managers portion of the conference committee report
that includes income tax deficiencies within the definition of
personal interest cannot be said to be clearly inconsistent with
section 163(h)(2)(A). We so conclude.
We reached the opposite conclusion in Redlark v.
Commissioner, 106 T.C. at 46, and we used that conclusion as the
basis for disregarding the 1986 Blue Book. The 1986 Blue Book
provides, in pertinent part, as follows:
Personal interest also includes interest on
underpayments of individual Federal, State or local
income taxes notwithstanding that all or a portion of
the income may have arisen in a trade or business,
because such taxes are not considered derived from the
conduct of a trade or business.60 However, personal
interest does not include interest payable on estate
tax deferred under sections 6163 or 6166.
________________
60 Personal interest does not include interest on
taxes, other than income taxes, that are incurred in
connection with a trade or business. (For the rule
that taxes on net income are not attributable to a
trade or business, see Treas. Reg. sec. 1.62-1(d),
relating to nondeductibility of State income taxes in
computing adjusted gross income.) * * * [1986 Blue
Book at 266.]
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