Barton Beek and Dorothy M. Beek v. Commissioner of Internal Revenue, Gerald T. And Anne Sparling v. Commissioner of Internal Revenue

BOOCHEVER, Circuit Judge:

Petitioners were limited partners of a calendar year, cash-basis partnership. The partnership bought real property in 1976 under a contract calling for installment payments, and prepaid one year’s worth of interest. The partners deducted that prepaid interest in full in 1976, and the Commissioner disallowed the portion of the deduction allocable to 1977. The Tax Court, 80 T.C. 1024, upheld the Commissioner, and the partners appeal. We affirm.

FACTS

All of the petitioners were limited partners of Crystal, a California cash-basis, calendar year partnership formed in…