- 19 -
is not deductible. Sec. 1.262-1(b)(2), Income Tax Regs. Thus,
petitioner is not entitled to deduct the foregoing amount.8
Also included in the closing costs that petitioner seeks to
deduct is a $167 "loan origination fee", which is further
described on the settlement sheet as "0.218%". Petitioner has
offered no evidence concerning whether this amount represents
prepaid interest or instead a payment for services rendered by
the financial institution that provided the financing. Thus,
this amount is not deductible as interest under section 163.
Goodwin v. Commissioner, 75 T.C. 424, 440-442 (1980), affd. 691
F.2d 490 (3d Cir. 1982); Wilkerson v. Commissioner, 70 T.C. 240,
253 (1978), revd. on another issue 655 F.2d 980 (9th Cir. 1981);
Enoch v. Commissioner, 57 T.C. 781, 794-795 (1972); Cao v.
Commissioner, T.C. Memo. 1994-60, affd. 78 F.3d 594 (9th Cir.
1996); Dozier v. Commissioner, T.C. Memo. 1982-569.
Since petitioner has failed to show that the loan
origination fee is interest, it falls into the same category as
the bulk of the remaining closing costs that he seeks to deduct;
namely, the $250 appraisal fee, the $391 attorney's fee, and the
8 Petitioner also seeks to deduct $17 listed on the
settlement sheet as for "flood". Other than the settlement
sheet, petitioner offered no evidence concerning what the "flood"
item represents. Given the evidence, we conclude that the item
is either flood insurance, in which case it is not deductible
under the authority cited above, or it is something else, not
deductible for lack of proof concerning the nature of the
expenditure.
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