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Respondent determined deficiencies in petitioners’ Federal
income taxes for the taxable years 1999, 2000, and 2001 in the
amounts of $3,961, $6,583, and $9,715 respectively.2
After concessions by the parties, the sole issue for
decision is whether petitioners are entitled to investment
interest expense deductions for the taxable years 1999, 2000, and
2001 in excess of the amounts allowed by respondent. We hold
that they are not.
Background
Some of the facts have been stipulated, and they are so
found. Petitioners resided in Lilburn, Georgia, at the time that
their petition was filed with the Court.
Petitioners timely filed their Form 1040, U.S. Individual
Income Tax Return, for the taxable year 1999. Petitioners
attached to their return Schedule A, Itemized Deductions, and
claimed an investment interest expense deduction of $31,215.
Petitioners calculated this amount on an attached Form 4952,
Investment Interest Expense Deduction, as shown below:
2 All numbers are rounded to the nearest dollar.
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