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v. Commissioner, 84 T.C. 889, 897 (1985), affd. without published
opinion 805 F.2d 1073 (D.C. Cir. 1986); Brown v. Commissioner, 1
T.C. 225, 227 (1942). Thus, interest paid by a taxpayer on the
indebtedness of the taxpayer’s mother is not deductible by that
taxpayer. Schrayter v. Commissioner, T.C. Memo. 1979-388; Emmons
v. Commissioner, T.C. Memo. 1961-290.
The regulations also provide that a taxpayer who is a legal
or equitable owner of mortgaged real property may deduct interest
paid as interest on indebtedness, even though the taxpayer is not
directly liable on the bond or note secured by such mortgage.
Sec. 1.163-1(b), Income Tax Regs. In Golder v. Commissioner, 604
F.2d 34, 36 (9th Cir. 1979), affg. T.C. Memo. 1976-150, the Court
of Appeals for the Ninth Circuit, to which an appeal in this case
would lie if the case were appealable, construed the foregoing
regulation. The Court of Appeals explained in pertinent part
that that regulation “does nothing more than permit the deduction
of interest in situations where the taxpayer-borrower is not
personally liable on a mortgage of property which is used as
security for a loan made to the taxpayer.” Id.
Petitioner alleges that the claimed interest deduction was
interest paid by him on a mortgage loan taken out by his mother
on her house, and that the money was borrowed so petitioner could
run a business. Petitioner claimed he promised to pay the
mortgage loan and that his failure to repay would result, upon
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