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of the interest out of his or her own funds. See Finney v.
Commissioner, T.C. Memo. 1976-329, and authorities cited therein.
In Finney, the taxpayer and his wife were separated during
the taxable year 1971 and held a residence as tenants by the
entirety during that year. Although the mortgage interest
payments were nominally made by the taxpayer’s wife, this Court
concluded that he had satisfied his burden of proving that the
funds used to make the interest payments were his funds, and he
was therefore entitled to the deduction. However, in reaching
this conclusion we relied upon a stipulation entered into between
respondent, the husband, and the wife that the funds used to make
the interest payments were supplied by the husband.
Another case dealing with this issue is Kohlsaat v.
Commissioner, 40 B.T.A. 528 (1939). In Kohlsaat, the Board of
Tax Appeals9, likewise, concluded that taxpayer-husband was
entitled to a deduction for mortgage interest payments made with
respect to a former marital residence even though the payments
were nominally made by his ex-wife. However, in that case the
divorce decree provided that in addition to his obligation to
make monthly alimony payments to his ex-wife, he was directed to
pay $225 per month to his ex-wife, and she was directed to use
these funds to make the mortgage payments for which he was
9The Revenue Act of 1942, ch. 619, 56 Stat. 798, established
the Tax Court of the United States on Oct. 21, 1942, which
superseded the United States Board of Tax Appeals.
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