Antonio G. and Bonnie L. Montoya - Page 4

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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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