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least a portion of the “home mortgage interest” expense deduction
is allowed. In general and simply put, a taxpayer is entitled to
a deduction for qualified residence interest (referred to on the
Schedule A as “home mortgage interest”). Sec. 163(h)(2)(D).
In this case, petitioner has failed to establish that any
such interest has been paid. She produced a copy of a mortgage,
but the instrument shows that the underlying indebtedness is
payable “on demand”. Assuming, without finding, that the real
estate subject to the mortgage is a “qualified residence” within
the meaning of section 163(h)(3) and (4), it remains that
petitioner has not produced any documents evidencing that any
payments on the mortgage had been made during the year in issue.
Petitioner is not entitled to the deduction for home mortgage
interest claimed on the Schedule A included with the unprocessed
amended return.
That being so, as noted above, we need not consider whether
petitioner is entitled to the deductions for State income taxes
and gifts to charity because the total of those two claimed
deductions, even if allowed in full, would be less than the
standard deduction.
2. Schedule C Items
In general, a taxpayer is entitled to a deduction for all
ordinary and necessary business expenses. Sec. 162(a). The
types of deductions claimed on the Schedule C included with the
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Last modified: May 25, 2011