T.C. Mem o. 2 01 3- 29 5

UNITED STAT ES TAX COURT

JAM ES CURTIS BR EW ER, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 22 58 7- 11
. File d Dec em be r 30 , 20 13
.
Fran k Ag os ti no , Lawren ce Br od y , Jai ro G. Cano , andCh ry st al Loyer, for pe ti ti on er. Ro be rt W. Mop si ck , forres po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION
W ELLS, Ju dg e: Res po nd en t d et erm in eda de fic ie nc y of $ 7,6 80 in pe ti ti on er’s Fed eral in co m e ta x fo r hi s 2 00 8 t ax y ear. Duri ng tri al , pet it io ne r 1
Unl es s o th erwi se in di cat ed , sec ti on refe ren ces are t o the Int ern al Rev enue 1 (co nt in ue d...)- 2 -

[* 2] co nc ed edth athi s St at e ta x re fundof $ 1,1 06 is tax ab le an d s ho ul d b e in cl ud ed in hi s 2 00 8 t ax ab le in co m e. Afterpe ti ti on er’s co nc es si on , th e o nl y is su e th atwe 2
m us t d eci de is whethe r pe ti ti on er i s en ti tl edto th e fi rs t-t im e h om eb uyer cred it (FTHBC) , pu rs uantto sec ti on 36 , of $ 7,5 00 forhi s 2 00 8 t ax y ear. FINDINGS OF FACT So m e o f th e fac ts an d c ert ai n e xh ib it s h av e b eenst ip ul at ed . The p art ie s’ st ip ul at io ns of f

act s ar e in co rp or at edinth is op in io n b y refe ren ce an d are fo un d
acco rd in gl y . Peti ti on er re si de d i n New J ers ey at t he ti m e h e fi le d h is pe ti ti on . Fo r atlea stth e p as t 1 1 years, p et it io ne r ha s b eenem pl oyed as anin te rn al
rev enue off

ic er b y th e In te rn al Rev enue Serv ic e (IR S) i n Ed is on , New Jer se y . I. Pet it io ne r’s Res id en ces On J anua ry

21 , 20 05 , pet it io ne r pu rch as eda res id en ti al co nd o wi th on e be dr oo m an d o ne bath ro om

inSta te n Is land , New York(St at enIsl an d p ro pe rty). Pet it io ne r li ve d at the Sta te n Is landpro pe rty un ti l Jun e 2 00 5, wh enhe m ov edin
(...co nt inue d) 1 Co de of 1 98 6, as am en de d a ndineffe ctfor th e y ear i n i ss ue , andRu le refe ren ces are t o the Tax C ou rt Rul es of P ract ic e an d P ro cedur e. W e ro un d a ll m on et ary am ount s t o the ne ares t d ol lar. Rem ai ni ng ad

jus tm en ts setforth by resp on de ntinth e n ot ic e o f de fic ie nc y 2 de pe ndon a Ru le 15 5 c om pu ta ti on , whi chwe or de r be lo w, andne edno t b e ad dr es se d i n thi s o pi ni on .- 3 -

[* 3] with Arm en iaLore nz o (M s. Lo ren zo ), hi s “ si gn ifi can t o th er” a t tha t t im e, at 3 he r ho m e in Eli zab eth, New J ers ey (Eli zab eth p ro pe rty). Peti ti on er m ov edto th e Eli zab eth p ro pe rty becaus e h e fel t i t was m or e co nv en ie ntforhi s co m m ut e to hi s workp la ce an d fo r Ms . Loren zo ’s comm ut e to he r sc ho ol , bo th of wh ic h wer e in New Je rs ey . After h e m ov edou t o f th e St at enIsl an d p ro pe rty durin g J un e 2 00 5, pe ti ti on er d idno t re tu rnto res id e th ere. Pet it io ne r ob ta in eda m ai lb ox at Th e UPS St or e No. 2 94 7 i n Ed is on , New Je rs ey (UPS m ai lb ox ). Pet it io ne r us edth e UPS m ai lb ox to rece iv e al l o f hi s m ai l be cau se he th ou gh t tha t h e p rev io us ly hadbe ena vi ct im of m ai l the ft a ndcred it cardfrau d. Al so du rin g J un e 2 00 5, p et it io ne r ob ta in eda New Je rs ey dri ve r’s li cen se , whi chli st edth e UPS m ai lb ox as h is ad dr es s. Pet it io ne r atte nd edchur ch in New Jer se y . At o r ab ou t the ti m e p et it io ne r m ov edou t o f th e St at enIsl an d p ro pe rty du rin g J un e 2 00 5, Kat he rin e Bre wer (M s. Br ewer) , pet it io ne r’s si st er wh o i s a stud en t atNew YorkCit y Tech ni cal Co ll eg e in Bro ok lyn, m ov edin to th e St at en Is landpro pe rty. Ms. Brewe r co nt in ue d t o re si de at t he Sta te n Is landpro pe rty th ro ug h 2 00 7 b utdi d n otpa y ren t t o p et it io ne r atan y

ti m e fro m

20 05 to 20 07
.
Pet it io ne r ev en tu al ly m arri edMs . Loren zo onJu ne 21 , 20 08 , bu t d iv or ced 3 he r be fo re tria l. Acco rd in gl y , we con ti nu e to refe r to he r as “ Ms . Loren zo ”.- 4 -

[* 4] Dur in g Au gu st20 06 , pet it io ne r te m po rari ly m ov edto Bro ok lyn to li ve with hi s m ot he r in Bro ok lyn, New York(Bro ok lyn pr op erty ), be cau se of r el at io ns hi p pr ob le m s wi th Ms . Loren zo . Peti ti on er an d M s. Lo ren zo res ol ve d the ir p ro bl em s an d, thr ee m on th s af

te r m ov in g t o the Bro ok lyn pr op erty , pet it io ne r returne d t o the Eli zab eth p ro pe rty. On No ve m

be r 20 , 20 08 , pet it io ne r an d M s. Lo ren zo purch as eda si ng le
fam il y ho m e in Aven el , New Jer se y (Ave ne l p ro pe rty). In co nn ect io n wi thth e pu rch as e, pe ti ti on er’s rea lt orco m pl et eda Fo rm

HUD-1, Un ifo rm

Set tl em en t St at em en t (F orm

HUD-1), an d l is te d p et it io ne r’s Sta te n Is landpro pe rty as the ad dr es s o f th e b orro wer. As o f th e d at e o f tr ia l, p et it io ne r co nt in ue d t o o wn the Ave ne l p ro pe rty j oi nt ly w ith M s. Lo ren zo . II. Pet it io ne r’s Tax R eturns Fo r hi s 2 00 5 t ax y ear p et it io ne r fi le d aNew YorkSta te pa rt- y ear r es id en t ta x re turnan d aNew Jer se y Sta te part- y ear r es id en t t ax return, b ecau se he work ed in New Jer se y

bu t re si de d a t b ot h the Sta te n Is landpro pe rty andth e Eli zab eth pr op erty du rin g 2 00 5. Fo r hi s 2 00 6 t ax y ear p et it io ne r fi le d aNew YorkSta te pa rt- y ear r es id en t ta x re turnan d aNew Jer se y Sta te part- y ear r es id en t t ax return, b ecau se he work ed in New Jer se y

bu t re si de d a t b ot h the Bro ok lyn pr op erty an d the Eli zab eth- 5 -

[* 5] pr op erty

du rin g 2 00 6. Onhi s 2 00 6 F ed eral in co m e ta x re tu rn , pet it io ne r li st edth e St at enIsl an d p ro pe rty as h is ad dr es s an d c la im edde du ct io ns forreal
es ta te tax es an d m ortg ag e in te res t i n c on ne ct io n wi th th e St at enIsl an d p ro pe rty. Fo r hi s 2 00 7 t ax y ear p et it io ne r fi le d o nl y a New Je rs ey

Sta te res id en t t ax return, b ecau se he res id edon ly at th e Eli zab eth p ro pe rty durin g 2 00 7. Onhi s 20 07 Fed eral in co m e ta x re turnpe ti ti on er l is te d the UPS m ai lb ox as h is ad dr es s an d c la im edde du ct io ns for real est at e ta xe s an d m ortg ag e in te res t i n c on ne ct io n with the Sta te n Is landpro pe rty. Fo r hi s 2 00 8 t ax y ear p et it io ne r fi le d o nl y a New Je rs ey

Sta te res id en t t ax return, b ecau se he res id edon ly at th e Eli zab eth p ro pe rty durin g 2 00 8. OnApri l 15 , 20 09 , pet it io ne r an d M s. Lo ren zo fil eda joi ntFed eral in co m e ta x re turnfor th ei r 20 08 tax y ear. Onth ei r 20 08 joi ntFed eral in co m e ta x re tu rnpe ti ti on er an d Ms . Loren zo li st edth e Ave ne l p ro pe rty as the ir a dd res s an d c la im edanFTHBC pu rs ua ntto sec ti on 36 of $ 7,5 00 , inco nn ect io n wi th th e p ur ch as e o f th e Ave ne l pr op erty . On J ul y 5, 2 01 1, re sp on de ntsen t p et it io ne r a n ot ic e o f de fic ie nc y de te rm in in g tha t p et it io ne r owe d ade fic ie nc y of $ 7,6 80 forhi s 2 00 8 t ax y ear upo n di sa ll owa nc e o f pe ti ti on er’s cl ai m of a n F THBC. On Oct ob er 3 , 20 11 , pet it io ne r ti m el y fil eda pe ti ti on inth is Co urt.- 6 -

[* 6] OPINION Gen eral ly, th e Co m

m is si on er’s d et erm in at io n o f a d efi ci en cy is pre su m ed
co rrec t, an d the tax pa y er h as th e b ur de n o f pr ov in g i t i nc orrect . Rul e 1 42 (a); W el chv. Hel ve rin g, 2 90 U.S. 11 1, 1 15 (19 33 ). Sect io n 7 49 1( a)(1 ) pr ov id es an ex cep ti on th atsh ift s the bu rd enof p ro of to th e Co m

m is si on er as to any

factua l is su e rel ev an t t o atax pa y er’s l iabi li ty for t ax if: (1) th e ta xp ay er i nt ro du ces cred ib le ev id en ce wi th res pe ctto th atis su e; an d (2 ) th e ta xp ay er s at is fie s ce rta in ot he r co nd it io ns , in cl ud in g s ub st an ti at io n o f an y it em an d c oo pe rat io n wi thth e Gov ern m en t’s re qu es ts forwitne ss es , do cu m en ts , othe r in fo rm at io n, an d m eet in gs . Sec. 7 49 1( a)(2 ); s ee al so Ru le 14 2( a)(2 ). Becaus e we d eci de th e fac tu al is su es in th e in st an t ca se on th e p rep on de ran ce o f th e ev id en ce, the all oc at io n o f th e b ur de n of pro of is im m at eri al . See Knud se n v . Comm is si on er, 1 31 T.C. 18 5, 1 89 (20 08 ). Sect io n 3 6( a) al lo ws a c red itfora fi rs t-t im e h om eb uyer of apri nc ip al
res id en ce. A fir st -ti m e h om eb uyer is “ an y in di vi du al if s uc h i nd iv idua l (a ndif
m arri ed , su chin di vi du al ’s sp ou se ) ha d n o p res en t o wne rs hi p i nt eres t i n apri nc ip al
res id en ce dur in g the th ree- y ear p eri oden di ng on th e d at e o f th e p ur ch as e o f th e pr in ci pa l re si de nc e to whi chth is sec ti on ap pl ie s.” Se c. 36 (c)( 1) . Peti ti on er i s el ig ib le as afir st -ti m e h om eb uyer if h e d idno t h av e anown ers hi p i nt eres t i n a- 7 -

[* 7] pri nc ip al res id en ce af te r Nov em

be r 19 , 20 05 , andbe fo re No ve m be r 20 , 20 08
. See F os te r v. C omm is si on er, 1 38 T.C. 51 , 52 -5 3 (2 01 2)
. Fo r pu rp os es of t he FTHBC, se ct io n 3 6( c)(2 ) pr ov id es th atth e te rm

“pr in ci pa l re si de nc e” h as th e sa m e m ean in g a s i n s ect io n 1 21 . Whe th er a t ax pa y er us es a pr op erty

as h is or h er p rin ci pa l re si de nc e d ep en ds up on all th e fac ts an d ci rcu m st an ces . See s ec. 1 .12 1- 1( b) (2 ), In co m e Tax Reg s. Ord in ari ly, th e ta xp ay er’s p rin ci pa l re si de nc e is th e p ro pe rty the tax pa y er u se s dur in g m os t o f th e y ear. Se e id . Sect io n 1 .12 1- 1( b) (2 ), In co m e Tax Reg s., p ro vi de s:

(2 ) Pri nc ip al res id en ce. * * * In a dd it io n t o the tax pa y er’s u se of th e p ro pe rty, relev an t fa ct or s i n d et erm in in g atax pa y er’s p rin ci pa l res id en ce, i nc lu de , bu t ar e n otli mit edto -- (i) The t ax pa y er’s p la ce o f em pl oym en t; (ii ) The pri nc ip al pl ace o f ab od e o f th e ta xp ay er’s fam il y m em be rs ; (ii i) Th e ad dr es s l is te d o n the tax pa y er’s fed eral an d s ta te tax returns , dri ve r’s li cen se , aut om ob il e reg is tra ti on , andvo te r reg is tra ti on card ; (iv ) The tax pa y er’s m ai li ng ad dr es s fo r bi ll s an d co rres po nd en ce; (v ) The lo cat io n o f th e ta xp ay er’s b an ks ; an d (v i) Th e lo cat io n o f rel ig io us org an iz at io ns an d re crea ti on al cl ub s wi th whi chth e ta xp ay er i s af fil iate d.- 8 -

[* 8] Res po nd en t co nt en ds th atpe ti ti on er was no t a f irs t-t im e h om eb uyer be cau se , aft er No ve m

be r 19 , 20 05 , pet it io ne r he ldanown ers hi p i nt eres t i n the St at enIsl an d p ro pe rty andus edth e St at enIsl an d p ro pe rty as h is pri nc ip al
res id en ce. Pet it io ne r do es no t d is pu te th athe ha d a n o wne rs hi p i nt eres t i n the St at enIsl an d p ro pe rty after Nov em be r 19 , 20 05 , bu t co nt en ds th atth e St at en Is landpro pe rty ceas edto be hi s p rin ci pa l re si de nc e whe n h e m ov edto th e Eli zab eth p ro pe rty durin g J un e 2 00 5. Acco rd in gl y , th e is su e th atwe m us t d eci de is whethe r th e St at enIsl an d p ro pe rty was p et it io ne r’s pr in ci pa l re si de nc e p ur su an t to sec ti on s 3 6 a nd12 1 a t an y ti m e aft er No ve m

be r 19 , 20 05
. Pet it io ne r te st ifi edth athe m ov edou t o f th e St at enIsl an d p ro pe rty andin to th e Eli zab eth p ro pe rty durin g J un e 2 00 5. Acco rd in g t o p et it io ne r, he m ov edto th e Eli zab eth p ro pe rty becaus e, in te r al ia , he c ou ldsp en d m or e ti m e wit h M s. Lo ren zo an d b ot h h e an d M s. Lo ren zo fou ndth ei r da il y co m m ut es to be m or e co nv en ie nt . 4 Pet it io ne r te st ifi edth athe att en de d c hu rch inNew Jer se y an d tha t h e o bt ai ne d a Res po nd en t co nt en ds th atpe ti ti on er’s St at enIsl an d p ro pe rty was cl os er t o 4 hi s wo rk pl ace t ha n h is Eli zab eth p ro pe rty. Ind eed , pet it io ne r do es no t cl ai m ot he rwis e; ho wev er, p et it io ne r cl ai m s tha t the co m m ut e to hi s wo rk

pl ace wa s m or e co nv en ie ntfro m

th e Eli zab eth p ro pe rty. W hi le res po nd en t m ay

be pro pe rly po in ti ng to th e d is tanc e o f th e co m m ut e, res po nd en t fa il s t o c on si de r, in te r al ia , pe ti ti on er’s trav el ti m e, acc es si bi li ty to fr eeways, tra ffi c p at te rn s, an d m as s tran si t op ti on s an d l im it at io ns fro m eachof t he two pro pe rti es . On th e b as is of t he reco rd , we con cl ud e th atres po nd en t’s co nt en ti on is , at b es t, i nc on cl us iv e o f th e is su e o f th e co nv en ie nc e o f pe ti ti on er’s co m m ut e fro m th e res pe ct iv e p ro pe rti es .- 9 -

[* 9] New Je rs ey

dri ve r’s li cen se at o r ab ou t the ti m e o f hi s m ov e to th e Eli zab eth pr op erty . Acco rd in g t o p et it io ne r, aft er h e m ov edto th e Eli zab eth p ro pe rty, he

5 al lo wedhi s s is te r, Ms . Brewer , who is a stud en t, t o re si de ren t fr ee atth e St at en Is landpro pe rty, whic h h adon ly a sin gl e b edro om an d asi ng le ba th ro om . Pet it io ne r te st ifi edth athe ne ve r returne d t o re si de at the Sta te n Is landpro pe rty
an d, b utfor

a br ie f st ay

with h is m ot he r atth e Bro ok lyn pr op erty , di d n otres id e ag ai n i n the Sta te of Ne w York . Peti ti on er m arri edMs . Loren zo on Ju ne 21 , 20 08 , an d the y joi nt ly pur ch as edth e Ave ne l p ro pe rty onNov em be r 20 , 20 08
. W e m ay acce pta ta xp ay er’s unv eri fie d t es ti m on y wher e we fi nditto be cred ib le an d p ers ua si ve . W oo ds v. Co m m is si on er, 1 37 T.C. 15 9, 1 65 (20 11 ); s ee al so Teym ou ria n v . Comm is si on er, T.C. Mem o. 2 00 5- 23 2, 2 00 5 WL 24 64 60 2, at *3 . W e d eci de whet he r a wit ne ss is cred ib le onth e b as is of o bjec ti ve fact s, the
reas on ab le ne ss of t he tes ti m on y , andth e d em ean or an d c on si st en cy

of s ta te m en ts
Res po nd en t co nt en ds th atpe ti ti on er’s driv er’s l ic en se is irr el ev an t b ecau se 5 (1 ) itwas i ss ue d o n Au gu st1, 2 01 2, wh ic h was fou r y ears aft er the th ree- y ear pe rio d s pe ci fie d i n s ec. 3 6( c)(1 ), an d (2 ) th e ad dr es s l is te d o n the dri ve r’s li cen se is th e UPS m ai lb ox . W e d is ag ree. Pe ti ti on er cr ed ib ly test ifi edth athe ob ta in edth e New Je rs ey

dri ve r’s li cen se at o r ab ou t the ti m e h e m ov edto th e Eli zab eth pr op erty an d tha t the dri ve r’s li cen se he pro du cedat t ria l was is su edon Aug us t 1 , 20 12 , bec au se he ha d re cen tl y ren ewedth e li cen se . Mor eo ve r, pe ti ti on er o ffer eda pl au si bl e ex pl an at io n fo r th e u se of t he UPS m ai lb ox as h is ad dr es s o n h is dri ve r’s li cen se ; t o wi t, p et it io ne r was po te nt ia ll y th e v ic ti m

of m ai l the ft a ndcred itcard frau d, an d h e ex erci se d c au ti on by notdi sp lay in g h is ho m e ad dr es s.- 10 -

[* 10 ] m ad e b y

th e witne ss . Quo ckTin g v . Uni te d S ta te s, 1 40 U.S. 41 7, 4 20 -4 21 (1 89 1) ; Woo d v . Commis si on er, 3 38 F.2d60 2, 6 05 (9t h C ir. 1 96 4) , aff’g 4 1 T.C. 59 3 (1 96 4) ; Co nc or d C on su m ers Hou s. Co op . v. Co m m is si on er, 8 9 T.C. 1 05 , 12 4 n.2 1 (1 98 7) . W e fi ndpe ti ti on er t o b e rea so nabl e an d h on es t an d h is tes ti m on y to be cred ib le an d p ers ua si ve . W e fi ndpe ti ti on er’s ex pl an at io ns of t he 6 in co ns is te nc ie s ar gu edby resp on de ntto be pl au si bl e an d h is tes ti m on y to be
co ns is te ntwith the ev id en ce o ffer ed . Accor di ng ly, onth e b as is of t he reco rd , we co nc lu de th atth e St at enIsl an d p ro pe rty was n otpe ti ti on er’s p rin ci pa l re si de nc e pu rs ua ntto sec ti on 36 at a ny tim e aft er No ve m be r 19 , 20 05
. Inad di ti on to th e ev id en ce t o wh ic h re sp on de ntpo in ts , res po nd en t g en eral ly ob jects to pe ti ti on er’s t es ti m on y as “ se lf- se rv in g” an d c on te nd s tha t p et it io ne r’s te st im on y is un de rm in edby his fai lu re t o c al l M s. Br ewer, Ms . Loren zo , or h is
m ot he r to tes ti fy

on hi s b eh al f, as well as h is fai lu re t o p ro du ce b il ls an d o th er do cu m en ts li st in g the Eli zab eth p ro pe rty as h is ad dr es s. We di sa gr ee. We ge ne ral ly do n otdra w an a dv ers e in fere nc e fro m a ta xp ay er’s fai lu re t o c al l an y sp eci fic witne ss wher e th e witne ss is equa ll y av ai labl e to bo th pa rti es an d n ei th er pa rty call s tha t wi tn es s attri al . Dun lap v . Comm is si on er, T.C. Mem o. 2 01 2- 12 6,
W e n ot e th atpe ti ti on er t es ti fie d tha t h e co ul d b e d is m is se d fr om hi s 6 po si ti onas arev enue off

ic er wi th th e IRS if h e g av e unt ru th fu l t es ti m on y .- 11 -

[* 11 ] 20 12 W L 15 24 66 0, at*2 7; Dang v. Co m m is si on er, T.C. Mem o. 2 00 2- 11 7, 20 02 W L 97 73 68 , at * 3. Pe ti ti on er’s fam il y m em be rs an d M s. Lo ren zo were equa ll y av ai labl e to bo th pa rti es , bu t re sp on de ntfai le d t o c al l an y of t he m to 7 te st ify. A cco rd in gl y , we refra infro m dra win g a n a dv ers e in fere nc e th atth ei r te st im on y wou ldbe un fav or ab le to pe ti ti on er. Reg ard in g p et it io ne r’s fai lu re t o of fer a s ev id en ce b il ls or o th er d oc um en ts li st in g p et it io ne r’s ad dr es s as th e Eli zab eth p ro pe rty, pet it io ne r cre di bl y tes ti fie d tha t h e h adno su chdo cu m en ts be cau se he di rect edall of h is m ai l t o the UPS m ai lb ox inord er t o p rev en t m ai l th eftan d c red itcardfrau d, wh ic h we c on cl ud e to be a vi ab le ex pl an at io n i n the li gh t o f pe ti ti on er’s t es ti m on y reg ard in g h is pre vi ou s ex pe rie nc e as a vi ct im of th os e cri m es . Res po nd en t al so co nt en ds th atpe ti ti on er i nd ic at edth atth e St at enIsl an d pr op erty was h is pri nc ip al res id en ce wh enhe li st edth atpro pe rty as h is ad dr es s o n hi s Fo rm HUD-1 an d o n h is 20 06 Fed eral in co m e ta x re tu rn . W e d o n otag ree. The Fo rm HUD-1 d oe s n otin di cat e p et it io ne r’s pr in ci pa l re si de nc e b ecau se it requi redhi m

to li ston ly the ad dr es s o f th e b orro wer an d n othi s h om e ad dr es s. Mo reo ve r, pe ti ti on er d idno t co m pl et e h is Fo rm

HUD-1; in st ead , pet it io ne r’s
Ms . Brewer , pet it io ne r’s si st er, was un av ai labl e fo r tr ia l b ecau se of h er n ew 7 em pl oym en t.- 12 -

[* 12 ] real to r co m

pl et editonpe ti ti on er’s b eh al f in co nn ect io n wi th pe ti ti on er’s pu rch as e o f th e Ave ne l p ro pe rty. Regar di ng pe ti ti on er’s 2 00 6 F ed eral in co m e ta x return, we fi ndth atpe ti ti on er’s u se of t he UPS m ai lb ox , whi chcle arl y can no t b e a

“ ho m e”, as hi s ad dr es s o n h is 20 07 Fed eral in co m e ta x re turnin di cat es pe ti ti on er’s ge ne ral be li ef tha t the ad dr es se s l is te d o n h is Fed eral in co m e ta x re tu rn s ar e n ot
ne ces sa ril y

in di cat iv e o f hi s p rin ci pa l re si de nc e. Acco rd in gl y , we con cl ud e th at
ne ithe r th e ad dr es s l is te d o n the Fo rm HUD-1 n orth e o ne li st edon pe ti ti on er’s 20 06 Fed eral in co m e ta x re turnis co nc lu si ve as t o p et it io ne r’s pr in ci pa l re si de nc e. W e fi ndth atth e b es t ev id en ce o f pe ti ti on er’s p rin ci pa l re si de nc e is hi s St at e ta x re turnfil in gs fro m

20 05 to 20 08 . For h is 20 05 an d 2 00 6 t ax y ears pe ti ti on er fil edbo th New Jer se y

an d New Yo rktax returns be cau se he sp en t s om e p orti on of each of t he two y ears res id in g i n e achof t he two Sta te s. Forhi s 2 00 7 a nd20 08 8 ta x years, p et it io ne r fi le d o nl y a New Je rs ey

tax return b ecau se he res id edso le ly at th e Eli zab eth p ro pe rty andwork edinNew Jer se y . Accor di ng ly, pe ti ti on er’s St at e

In20 05 , pet it io ne r res id edat t he Sta te n Is landpro pe rty in Ne w Yorkan d 8 th e Eli zab eth p ro pe rty in Ne w Jer se y . In 2 00 6 p et it io ne r res id edat t he Bro ok lyn pr op erty inNew Yorkan d the Eli zab eth p ro pe rty in Ne w Jer se y . Peti ti on er te st ifi edth athe fil eda part- y ear r es id en t 2 00 6 New Yo rktax return b ecau se of h is br ie f, th ree- m on th res id en ce atth e Bro ok lyn pr op erty an d n otbe cau se of h is own ers hi p o f th e St at enIsl an d p ro pe rty.- 13 -

[* 13 ] tax return fi li ng s i nd ic at e to us th at , aft er J un e 2 00 5, the Sta te n Is land pr op erty ceas edto be hi s p rin ci pa l re si de nc e fo r pu rp os es of the FTHBC. Res po nd en t al so co nt en ds th at , onhi s 2 00 6 a nd20 07 Fed eral in co m e ta x returns , pet it io ne r cl ai m edde du ct io ns forreal est at e ta xe s an d m ortg ag e in te res t with re sp ectto th e St at enIsl an d p ro pe rty andth atth is factsh ou ldbe co ns id ered whe n e va lu at in g wh ethe r th e St at enIsl an d p ro pe rty was p et it io ne r’s pr in ci pa l
res id en ce. W e d ecl in e to do so . A tax pa y er i s en ti tl edto de du ctan y in te res t p ai d 9
oraccrue d o n a cqui si ti on in de bt edne ss or h om e equi ty ind eb te dn es s wi th res pe ct to a qu al ifi edres id en ce. Sec . 16 3( h) (3 ). Pur su an t t o s ect io n 1 63 (h )(4 )(A)(i ), th e te rm “ qu al ifi edres id en ce” m ean s: (I) the pri nc ip al res id en ce (wi th inth e m ean in g o f se ct io n 1 21 ) of th e ta xp ay er, an d (II) 1 othe r res id en ce o f th e ta xp ay er wh ic h i s s el ect edby the ta xp ay er fo r pu rp os es of t hi s s ub se ct io n fo r th e ta xabl e y ear a nd whi chis us edby the tax pa y er as a res id en ce (wi th in th e m ean in g o f se ct io n 2 80 A(d )(1 )). Acco rd in gl y , tax pa y ers m ay cla im de du ct io ns form ortg ag e in te res t o n re al pr op erty othe r th ana pr in ci pa l re si de nc e. Sim il arl y , tax pa y ers m ay cla im a
Res po nd en t al so co nt en ds th atth e d educ ti on s o n p et it io ne r’s 20 06 an d 9 20 07 Fed eral in co m e ta x re turn s ev id en ce p et it io ne r’s own ers hi p i nt eres t i n the St at enIsl an d p ro pe rty. Resp on de nt ’s con te nt io n l ack s m eri t as pe ti ti on er d oe s n ot de ny his on go in g o wne rs hi p i nt eres t i n the Sta te n Is landpro pe rty.- 14 -

[* 14 ] de du ct io n p ur su an t t o s ect io n 1 64 (a)( 1) foran y “ [s ]tate an d l oc al , and fo rei gn , real pro pe rty tax es ” p ai d o r acc ru eddu rin g the tax ab le y ear; th ere i s n o requi rem en t fo r th e rea l p ro pe rty to b e th e ta xp ay er’s p rin ci pa l re si de nc e. Even th ou gh th e d educ ti bi li ty of th e m ortg ag e in te res t an d re al est at e ta xe s i s n otin is su e, we no te , witho utde ci di ng , th atitis po ss ib le th atpe ti ti on er m ay be en ti tl ed to su chde du ct io ns with re sp ectto th e St at enIsl an d p ro pe rty rega rd le ss of wh ethe r th e St at enIsl an d p ro pe rty was h is pri nc ip al res id en ce. Acco rd in gl y , we do no t
co ns id er tho se de du ct io ns as b ei ng rel ev an t t o the is su e o f whe th er the Sta te n Is landpro pe rty was p et it io ne r’s pr in ci pa l re si de nc e. 1 0 On the ba si s o f th e fo reg oi ng , we con cl ud e th atth e St at enIsl an d p ro pe rty
was no t, atan y

ti m e aft er No ve m

be r 19 , 20 05 , pet it io ne r’s pr in ci pa l re si de nc e fo r pu rp os es of s ect io n 3 6. Co ns eque nt ly, pu rs ua ntto sec ti on 36 (c)( 1) , pet it io ne r qu al ifi es as afir st -ti m e h om eb uyer an d i s en ti tl edto th e FTHBC fo r hi s 2 00 8 t ax y ear. 1 1

Res po nd en t ac kn owl ed ge s the same, as he co nc ed es th at“ a ta xp ay er m ay

1 0 cl ai m m ortg ag e in te res t an d re al est at e ta x d educ ti on s wi th res pe ctto real pro pe rty whi chis no t the tax pa y er’s p rin ci pa l re si de nc e, an d, thu s, tha t cl ai m in g the se de du ct io ns alo ne wou ldno t d is qu al ify tha t t ax pa y er fro m be in g c on si de reda fi rs tti m e h om eb uyer un de r [s ect io n] 36 (c)( 1) .” Howev er, as st at edab ov e, pe ti ti on er h as co nc ed edth athi s St at e ta x re fund 1 1 of $1 ,10 6 i s t ax ab le an d s ho ul d b e in cl ud edinhi s 2 00 8 t ax ab le in co m e.- 15 -

[* 15 ] Inreac hi ng th es e h ol di ng s, we h av e co ns id eredall th e p art ie s’ arg um en ts , an d, t o the ex te ntno t ad dr es se d h erei n, we co nc lu de th atth ey are m oo t, i rrel ev an t,
orwitho utm eri t. To re fle ctth e fo reg oi ng , D eci si on wil l b e en te redun de r Ru le 15 5.