-373-
On this record, we conclude petitioners’ 1986 interest
expense deduction was included in (but inadvertently omitted
from) the agreement of counsel narrowing the issues to be decided
by the Court. Bearing in mind that these cases were very
complicated, involving numerous issues covering several tax years
of several taxpayers, it is easy to understand how one adjustment
could easily have been overlooked in counsel’s announcement to
the Court that the parties had agreed to narrow the issues in
dispute. Moreover, respondent failed to qualify or take any
exception to petitioners’ counsel’s representations to the Court
regarding the scope of their agreement.
Thus, we are left only with the question whether the funds
from the TACI and PSAC accounts used to pay Kanter’s expenses
were Kanter’s funds. As previously discussed, the funds Kanter
held in the TACI and PSAC accounts were his funds or funds he
borrowed from other TACI or PSAC clients. Accordingly, the
Kanters are entitled the interest expense deduction they claimed
for 1986.
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