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directly allocable” is more restrictive than “properly
allocable”. Congress could have used the same standard, “clearly
and directly” in sections 469(e) and 163(h)(2)(A), yet, instead,
used the “properly allocable” standard for section 163(h)(2)(A).
Case law prior to the enactment of section 163(h)(2)(A)
defined the nexus between an interest expense and a trade or
business. An interest expense arising from a deficiency related
to a trade or business was treated like other business expenses
and could be deducted by a sole proprietorship. Standing v.
Commissioner, 28 T.C. 789 (1957, affd. 259 F.2d 450 (4th Cir.
1958); see Polk v. Commissioner, 31 T.C. 412 (1958), affd. 276
F.2d 601 (10th Cir. 1960); see also Reise v. Commissioner, 35
T.C. 571 (1961), affd. 299 F.2d 380 (7th Cir. 1962). The above
cases relied on sections 22(n)(1), 23(a)(1)(A) and 122(d)(5) of
the Internal Revenue Code of 1939. This definition comports with
the holding in United States v. Gilmore, 372 U.S. 39, 49 (1963),
which provided that the relevant inquiry is whether “the origin
and character of the claim with respect to which an expense was
incurred * * * is the controlling basic test of whether the
expense was ‘business’ or ‘personal’* * *”. Id.
Congress is considered to be aware of these cases and the
decisions existing before enactment of legislation. Dresser
Indus. v. United States, 238 F.3d 603 (5th Cir. 2001). Congress
is considered to be aware of “all pertinent judgments by our
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