- 99 -
SWIFT, J., dissenting: Mainly for the reasons set forth in
my prior concurring opinion in Redlark v. Commissioner, 106 T.C.
31, 48-49 (1996), revd. and remanded 141 F.3d 936 (9th Cir.
1998), I believe petitioners’ income tax deficiency interest
should be regarded as properly allocable to petitioners’ business
under section 163(h)(2)(A) and as deductible under section
163(a).
None of the five Courts of Appeals’ opinions cited by the
majority, or the instant majority opinion, persuades me to the
contrary. Within the jurisdictions of the other seven geographic
Courts of Appeals, taxpayers still are entitled to rely on our
Court-reviewed Redlark opinion, and that is exactly what Mr. and
Mrs. Robinson have done. Lardas v. Commissioner, 99 T.C. 490,
495 (1992).
Two separate but related facts in this case are clear and
undisputed: (1) Under the express and clear language of section
163(h)(2)(A), if an interest expense is “properly allocable” to a
trade or business, the interest expense is deductible; and
(2) the tax adjustments giving rise to petitioners’ 1987 tax
deficiency arose directly from and in connection with
petitioners’ law business. Accordingly, some portion of the
related interest expense should be allocable to the business and
should be deductible.
Under respondent’s “temporary” regulation, section 1.163-
9T(b)(2)(i)(A), Temporary Income Tax Regs., 52 Fed. Reg. 48409
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