Polakis v. Commissioner
United States Tax Court
P, a full-time physician, executed a promissory note in connection with the acquisition of an undeveloped parcel of unincorporated land known as the Mable Property. Shortly after purchase, P began investigating the development possibilities of the property, but took no affirmative steps to obtain a zoning designation compatible with development.
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P, a full-time physician, executed a promissory note in connection with the acquisition of an undeveloped parcel of unincorporated land known as the Mable Property. Shortly after purchase, P began investigating the development possibilities of the property, but took no affirmative steps to obtain a zoning designation compatible with development. Held, P purchased and held the Mable Property as an investment; consequently, the interest incurred on the acquisition debt is subject to the sec. 163(d), I.R.C. 1954, limitation.
1Opinion of the Court
NlMS, Chief Judge:
By a notice of deficiency dated July 25, 1984, respondent determined deficiencies in petitioners’ Federal income tax in the amounts of $21,342 for the taxable year ended December 31, 1981, and $9,388 for the taxable year ended December 31, 1982. After petitioners conceded respondent’s adjustment to travel expenses deducted on their Schedule C for 1981, the sole issue for decision is whether interest paid by petitioners constituted “investment interest,” the deductibility of which is limited under section 163(d).1
FINDINGS OF FACT
Some of the facts have been stipulated by the…
2Cases cited15 opinions
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- United States v. Ada Belle Winthrop, Individually and as Under the Will of Guy L. Winthrop, DeceasedCourt of Appeals for the Fifth Circuit · 1969
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