Harry T. Holgerson, Jr. And Mary Holgerson v. Commissioner of Internal Revenue

CURTIS, District Judge:

This is an appeal from a decision of the Tax Court upholding the Commissioner’s disallowance of the taxpayers’ deduction of “prepaid interest” during the taxable years 1967, 1968, and 1969.

In 1967 and 1968, Mr. Holgerson invested in several pieces of real estate with the intention of acquiring some good income producing property for his retirement years. In each of these transactions, substantial amounts of money were paid as “prepaid interest.” In joint returns filed during these years, the Holgersons sought to take deductions for the “prepaid interest” payments in…