John L. Seymour v. Commissioner

109 T.C. No. 14

UNITED STATES TAX COURT JOHN L. SEYMOUR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 2575-96. Filed November 5, 1997. P deducted the amount of interest paid to his former spouse on an indebtedness which he incurred incident to their divorce. P claimed that the indebtedness was properly allocable to investment, passive activity, and qualified residence indebtedness based on certain assets acquired pursuant to a decree of divorce. R disallowed such deduction on the ground that sec. 1041, I.R.C., requires P's interest expense to be characterized as…