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a casualty loss, and an additional amount for charitable
contributions.
Points
Petitioner presented a copy of a settlement statement to
substantiate a deduction for $3,800 in “points” as a mortgage
interest deduction. Petitioner testified that this was his third
refinancing.
Personal interest is generally not allowed as a deduction.
Sec. 163(h). “Qualified residence interest”, however, is not
treated as personal interest. Sec. 163(h)(2)(D). Qualified
residence interest includes interest paid on “home equity
indebtedness with respect to any qualified residence”. Sec.
163(h)(3)(A)(ii). Home equity indebtedness is indebtedness,
other than “acquisition indebtedness”, secured by a qualified
residence, to the extent that it does not exceed the fair market
value of the residence, reduced by the amount of the acquisition
indebtedness. Sec. 163(h)(3)(C). Acquisition indebtedness is
the indebtedness secured by the residence that was incurred in
acquiring, constructing, or substantially improving the qualified
residence. Sec. 163(h)(3)(B)(i).
The maximum amount that can be treated as home equity
indebtedness is $100,000. Sec. 163(h)(3)(C)(ii). Petitioner’s
loan amount was $170,000. Petitioner has provided no evidence of
the amount of the acquisition indebtedness, if any, or the fair
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