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A. Home Mortgage Interest
As stated above, respondent disallowed petitioner’s claimed
deduction of $7,134 for home mortgage interest paid during
taxable year 2000. Respondent contends that petitioner is not
entitled to any of the claimed deduction because the house was
purchased and encumbered by a mortgage in Ms. Lewis’s name and
titled in Ms. Lewis’s name. Petitioner testified that the house
was in Ms. Lewis’s name because of his bad credit history.
As pertinent here, section 163(a) and (h)(1) allows an
individual a deduction for all interest paid within the taxable
year on indebtedness, except for personal interest. Qualified
residence interest is excluded from the definition of personal
interest and thus is deductible under section 163(a). See sec.
163(h)(2)(D). Qualified residence interest is any interest which
is paid or accrued during the taxable year on acquisition
indebtedness or home equity indebtedness. See sec. 163(h)(3)(A).
Acquisition indebtedness is any indebtedness secured by the
qualified residence of the taxpayer or incurred in acquiring,
constructing, or substantially improving the qualified residence.
See sec. 163(h)(3)(B). The indebtedness generally must be an
obligation of the taxpayer and not an obligation of another. See
Golder v. Commissioner, 604 F.2d 34, 35 (9th Cir. 1979), affg.
T.C. Memo. 1976-150.
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