- 37 -
(b). Finally, the Quicken report, even when coupled with
petitioners’ testimony, does not satisfy the requirements imposed
by section 1.213-1(h), Income Tax Regs.9 We therefore disallow the
deduction for medical expenses for 1999.
B. Personal Interest
Petitioners deducted $20,903 of interest related to the
refinancing of their home mortgage. Respondent denied the
deduction.
Petitioners refinanced a preexisting home mortgage loan on
December 17, 1998. The terms of the December 17, 1998, refinance
loan (the 1998 loan) required petitioners to pay a $7,500 “loan
origination fee” at the inception of the 1998 loan. The stated
term of the 1998 loan was apparently 30 years. However, on
March 28, 2000, petitioners again refinanced their home and paid
off the 1998 loan in its entirety.
At trial, petitioners attempted to revive only $5,862 of the
$20,903 deducted on their return. They argued that the loan
origination fee constituted prepaid interest, and that because the
1998 loan lasted only 467 days, the bulk of the loan origination
9 It is unclear whether the dates on the report indicate
the date of payment, as required, or the date on which
petitioners entered the data into their computer. The Quicken
report also fails to adequately substantiate the address of any
payees as required by the regulation.
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