Bernard Resnik and Beverly Resnik v. Commissioner of the Internal Revenue Service

Bernard and Beverly Resnik appeal from an adverse decision of the United States Tax Court. By order of this court dated February 8, 1977, this appeal is submitted on the record and briefs, without oral argument. Fed.R.App.P. 2. 1

The central issue is whether a taxpayer may deduct, as a business loss, a prepaid interest payment covering a period of four years and three months, where the loss is the consequence of taxpayer’s interest in a limited partnership which had no income, the prepayment is its only expense, and the tax year is one day.

At the end of taxable year 1969, taxpayer was a…