Dieter Stussy - Page 5

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          schedules was for petitioner’s return preparation business.  This           
          Schedule C reported $550 of gross receipts and a net loss of $20.           
          The other Schedule C listed the proprietor as “D. Stussy, as                
          successor per IRC section 691(b)” and reported that the                     
          proprietor’s principal business activity was “Artist”.  This                
          Schedule C reported no gross receipts and one expense.  This                
          expense, in the amount of $4,665, was Federal and State income              
          tax deficiency interest paid as to petitioner’s 1992 through 1995           
          personal income tax returns.  Petitioner’s income tax liabilities           
          for 1992, 1993, and 1994 were determined by respondent on the               
          basis of this Court’s memorandum opinion in Stussy v.                       
          Commissioner, T.C. Memo. 1997-293.                                          
          1.  Burden of Proof                                                         
               The parties dispute who bears the burden of proof.  We need            
          not and do not decide that issue.  The record is sufficient for             
          us to decide this case on its merits.                                       
          2.  Interest                                                                
               Petitioner claims as a sole proprietorship expense a                   
          deduction for interest that he paid with respect to his personal            
          Federal and State income taxes.  Petitioner recognizes that the             
          Court of Appeals for the Ninth Circuit, the court to which this             
          case is appealable, held in Redlark v. Commissioner, 141 F.3d 936           
          (9th Cir. 1998), revg. and remanding 106 T.C. 31 (1996), that               

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