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his mother’s death, in a corresponding reduction in his
testamentary share of his mother’s estate.
Petitioners’ $4,841 interest expense deduction is the amount
listed on a 1998 Mortgage Interest Statement issued by Washington
Mutual. That statement shows that the payer/borrower is
petitioner’s mother’s trust, for which petitioner’s mother is the
designated trustee. The address on the statement is petitioners’
address.
Petitioner offered an American Savings Bank Federal Truth-
in-Lending Disclosure Statement dated August 23, 1994. The
underlying loan appears to be the loan for which the Washington
Mutual Interest Statement was issued. The American Savings Bank
Statement shows petitioner’s mother as the sole borrower of a
secured mortgage loan against property owned by her.
Petitioner is neither directly liable on the note securing
the mortgage on his mother’s property, nor is he a legal or
equitable owner of the property.
Assuming, arguendo, that petitioner made the monthly
payments of interest on his mother’s mortgage, under the cases
cited above he is not entitled to deduct those interest payments.
We sustain respondent’s determination on this issue.
Section 162(a) allows a deduction for ordinary and necessary
expenses paid or incurred during the taxable year in carrying on
a trade or business. Taxpayers must maintain sufficient records
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Last modified: May 25, 2011