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OPINION
A. Whether Petitioner May Deduct Various Expenses That CFB Paid
for Him in 2001
Petitioner contends that he may deduct mortgage interest
under section 163(h)(3), real estate tax under section 164(a)(1),
and condominium fees under section 162(a) paid for him by CFB in
2001. We disagree. Petitioner may not deduct these items
because they were paid by CFB, not petitioner. See Doggett v.
Commissioner, 275 F.2d 823, 827 (4th Cir. 1960), affg. T.C. Memo.
1958-176; Citizens Nat. Trust & Sav. Bank v. Welch, 119 F.2d 717,
719 (9th Cir. 1941); Kniffen v. Commissioner, 39 T.C. 553, 567
(1962); Budner v. Commissioner, T.C. Memo. 1984-542. Petitioner
disagrees and contends he can deduct CFB’s payments because they
were loans to him, which, because of the obligation to repay the
loans, were constructively paid by him. We disagree.
Petitioner introduced in evidence some pages from CFB’s
general ledger for 2001 that show that CFB routinely paid
petitioner’s personal expenses. The balance sheet on CFB’s Form
1120S for 2001 states that these payments were loans to
petitioner. However, neither those pages nor any other evidence
show that petitioner is obligated to repay CFB. Thus, petitioner
has not shown that CFB’s payments on his behalf were loans to
him.
Petitioner contends that Budner v. Commissioner, supra, on
which respondent relies, is distinguishable on two grounds.
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Last modified: May 25, 2011