- 4 - 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 recordsPage: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011