T .C. Su m m ary Op i n io n 2 01 7 -1 1

UNITED STATES TAX COURT

J AM ES DAVID J ACKSON, Pet i t i o ner v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 6 4 9 1-1 6S. Fi l edM arch 6 , 2 0 17
.

J am es Dav id J ack s o n , p ro s e. Ri c D. Hu l s h off an dRo l l i n G. Th o rl ey , fo r res po n den t .

SUM M ARY OPINION GOEKE, Ju d g e: Th i s cas e was h eardp u rs u an tt o t h e p ro v i s i o n s o f s ect i o n 7 4 6 3 1 o f t h e In t ern al Rev enu e Co d e i n effect wh en th e p et it i on was fi l ed
.

1 Al l s ect i o n referen ces are t o th e In tern al Rev en u e Co d e i n effect fo r t h e y ear i n i s s u e, an d al l Ru l e referen ces are t o the Tax Co urtRu l es o f Pract ice an d (co n ti n u ed ...)- 2
-

Pu rs u an t t o s ect i o n 7 4 6 3(b ), th e d eci s i o n t o b e en t eredi s n o trev i ewab le b y an y
o t h er co u rt , an dth i s o p i ni o n s h al l n o t b e t reat ed as p reced en tfo r an y o th er cas e. Res p o n d en td et erm i n eda d efi ci en cy o f $ 1 ,5 0 8 i n p et i t i o n er’ s Fed eral i n co m e t ax fo r 2 0 1 3. Pet i t i o n er fi l eda t im el y p et i t i o n fo r red et erm i n at i o n wi t h th e Co u rtp u rs u an tt o s ect i o n 6 2 13 (a). Th e i s s u e fo r d eci s i o n i s wh et h er p et i t i o n er i s
en t i t l edt o a d edu ct i o n fo r qu al i fi edres id en ce i n t eres t t h ath e cl ai m edo n Sch edu l e A, It em i zedDedu ct i on s , fo r t ax y ear 2 0 1 3
. Back gro u n d Atth e t im e t h e p et i t i on was fi l ed , p et i t i o ner res i d edi n Nev ad a. Pet i t i o n er d i dn o t ap p ear at tri al o n Oct ob er 5 , 2 0 1 6
. He d i dap p ear, h owev er, t wo d ay s b efo re at cal en d ar cal l o n Oct o b er 3 , 2 0 1 6 . Pet i t io n er d i dn o tt es t i fy an d d i dn o t cal l an y wi t n es s es . OnNo v em b er 1 6 , 2 01 6 , th e p art i es fi l eda s t i p u l at io n o f fact s . W e o rd eredp et i t i on er t o co n fi rm th at h e wan t edt o s ub m i tth i s cas e fu l l y
s t ip u l at ed . No res p o n se t o th e Co u rt ’ s o rd er was recei v edb y o r o n b eh al f o f p et i t i o n er. By

o rd er d at edJ an uary5 , 2 0 1 7 , we cl o s edth e reco rdan do rd eredthe
cas e s ub m it t edu n d er Ru l e 1 2 2
.

1 (...co n t in u ed ) Pro cedure. Al l m o n et ary am o u n t s are ro u nd edt o the n eares t d o l l ar.- 3
-

Pet i t i o ner fi l eda Fo rm 1 0 4 0 , U.S. In d i v i du al In co m e Tax Retu rn , fo r t ax y ear 2 0 1 3 . OnSch edu l e A at t ach edt o h i s Fo rm 1 0 40 h e cl ai m eda m o rt g ag e i n t eres td edu ct io n o f $ 1 4 ,4 0 0 . Res po n d en td i s al l o wedth e m o rt g ag e i nt eres t d educt i o n an d d et erm i n edan accu racy -rel at ed p en al t y u n d er s ect i o n 6 6 6 2
. 2 Du ri n g 2 0 1 3 p et i t i o n er l i v edwi t h h i s g i rl fri en d , J ul i e Fu rn ey , i n a res i d en ce i n Nev ad a t h ats h e h adp u rch as edi n 2 0 0 5 . M s. Fu rn ey h adfi n an cedth e p u rch as e
o f t h e res i d en ce wi t h a m o rt g ag e p ro v i d edb y Co un t rywi d e Fi n an ci al (a m o rt g ag e l en d er s ub s equ en tl y

acq u i redb y

Ban k o f Am eri ca). Pet i t io n er was n o t ab l e t o jo i n M s . Fu rn ey

i n o b tai n i n g a m ort g ag e o n th e res i d en ce i n 2 0 0 5 b ecau s e o f p ers o n al d eb t p ro b l em s . M s . Fu rn ey

i s l i s t edas the s o l e o wn er o n th e d eedt o t h e p ro p ert y an das th e
o n l y p ers o n res p o n si b le o n t h e m o rt g ag e. Ban ko f Am eri ca i s s uedFo rm 1 09 8 , M o rt g ag e In teres tSt at em en t , fo r 2 0 1 3 o n l y t o M s . Fu rn ey

fo r t h e en t i re am o u n to f i n t eres tp ai d ; i ti s s u edn o Fo rm 1 0 98 t o p et i t i o n er. M s . Fu rn ey p ay s al l h o m eo wn ers i n s uran ce p rem iu m s an dp ro p erty t ax es as s es s edo n th e p ro p ert y . Th e reco rdi n cl u d es a co p y o f a l et t er fro m

M s . Fu rn ey

t o res p o n d en t ’ s
co u ns el , d at edAp ri l 7 , 2 0 1 5 , s t at i n g i n p ert i n en tp artth at p et i t io n er “ h as p ai dth e
am ou n to f $ 1 ,0 0 0 p er m on t h o n t h e M o rt g ag e p aym en t* * * fo r t h e p as t 1 0 y ears ”.

2 Res p o n d en tco n ced es t h e s ec. 6 6 6 2 p en al t y .- 4
- Di s cu ss i o n As a g en eral ru l e, d edu ct i o n s are a m at t er o f l eg i sl at i ve g race, an dth e t ax p ay er b ears th e b u rd en o f p ro v i n g en t it l em en t t o an y cl ai m ed d edu ct i o n . 3 Ru l e 1 4 2 (a); INDOPCO, In c. v . Co m m i ss i o ner, 5 0 3 U.S. 7 9 , 8 4 (1 9 9 2 ); New Co l o n i al Ice Co . v . Hel v eri n g , 2 9 2 U.S. 4 3 5 , 4 4 0 (1 93 4 ). Th i s b urd en req u i res th e t ax p ay er t o s ub s t an t i at e i t em s u n derl y i n g d edu ct i o n s cl ai m edb y k eep i ng an dp ro duci n g ad equat e reco rd s th aten ab l e th e Co m m i s s i o n er t o d et erm i n e t h e t ax p ay er’ s co rrect t ax l i ab i l i t y . Sec. 6 0 01 ; Hi g bee v . Co m m i s si o n er, 1 1 6 T.C. 4 3 8 , 4 4 0 (2 0 0 1 ); Hrad es ky v . Co m m i s s io ner, 6 5 T.C. 8 7 , 8 9-9 0 (1 9 75 ), aff’ dp er cu ri am , 5 4 0 F.2 d 8 2 1 (5 th Ci r. 1 9 76 ). Th i s i s n o tth e fi rs t t i m e p et i t i o ner h as ap p eared b efo re t h i s Co u rt . In J ack s o n v . Co m

m i s s io ner, T.C. Su m

m ary Op i n i on 2 0 1 6-3 3 , p et i t i o ner arg u edth at h e was en t i t l edt o t h i s s am e d edu ct i o n co ncern i n g the s am e p ro p ert y b u tfo r t ax y ears 2 0 1 1 an d2 0 1 2 . Inth atcas e h e fai l edt o s h ow t h ath e h adp ai dan y m o rt g ag e i n t eres to r t h ath e h el dan y o wn ers h i p i nt eres ti n the p ro p ert y . Id . Th e cl ai m p et i t i o n er m ak es h ere, h o wev er, i s wi t h res pect t o t ax y ear 2 0 13
.

3 Pet i t i on er d o es n otcl ai m an dth e reco rdd o es n o ts h o w th atth e p ro v i s i o n s o f s ec. 7 4 9 1 (a) are ap p l i cab l e, an dwe p ro ceed as th o u g h t h ey are n o t.- 5
-

In g en eral , s ect i o n 16 3 (h )(3 ) an d(4 ) al l o ws a d edu ct i o n fo r i n t eres tp ai do r
accru edo n cert ai n i n d eb t ed n es s , i n cl u di n g acq u i s i t i o n i n d eb t ed n es s o n a qu al i fi ed
res i den ce. Th e acq u is i t io n i n d eb t ed n es s g en eral l y m us tb e an o b l i g at i o n o f t h e t ax p ay er an dn otan o b l ig at i o n o f an o th er. 4 See Go ld er v . Co m m i s s i o n er, 6 0 4 F.2 d 3 4 , 3 5 (9 t h Ci r. 1 97 9 ), aff’ g T.C. M em o . 1 9 76 -1 5 0. Ev en i f t he t ax p ay er i s n o t d i rect l y l iab l e u n d er t h e m o rt g ag e, h e m ay n ev ert h el es s b e en t i t l edt o a d edu ct i o n fo r qu al i fi edres id en ce i n t eres tp ai di f h e can es t ab l i s h l eg al o r eq u i t ab le
o wn ers hi p o f th e m ort gag edp ro p ert y . Sec. 1 .1 6 3-1 (b ), In co m e Tax Reg s .; s ee, e.g ., Tran s v . Co m

m i s si o n er, T.C. M em o . 1 9 9 9 -2 3 3 ; Us l u v . Co m m i s si o n er, T.C. M em o. 1 9 9 7 -5 5 1
. Du ri n g cal en d ar cal l p et i t i o n er as kedth atwe fo l l o w th e h ol d in g i n Bro ns t ei n v . Co m

m i ss io n er, 1 3 8 T.C. 3 8 2 (2 0 1 2 ). In Bro n s t ei n t h e i ss ue was th e
am ou n to f i n d eb t edn es s o n wh i ch th e t ax p ay er co u l d cl ai m a m o rt g ag e i nt eres t d educt i o n , an dth ere was n o di s p u t e wh et her t h e t ax p ay er act u al l y p ai d $ 4 9 ,7 3 9 i n i n t eres to n h er m o rt g ag e. Id . at3 8 4 . Pet i t i o n er h as fai l ed t o p ro v i de an y o b ject i v e
ev i d en ce t h ath e p ai dthe m o rt g ag e i n t eres ti n i s s u e o r t h ath e h adan equ i t ab l e i n t eres to f an y k i n di n th e p ro pert y b ecau s e o f h i s p aym en t s .

4 W e as s um e wi th ou td eci d i n g t h atth e m o rt g ag e i n qu es t i o n co n st i tu t es acq u is i t io n i n d eb ted n es s o n a qu al i fi edres i den ce.- 6
-

Pet i t i o ner rel i es o n M s . Fu rn ey ’ s Ap ri l 2 0 1 5 l et t er an dth e s t i p u l at i o n o f fact s t o s at is fy h i s b u rd en o f p ro o f wi t h res p ectt o th e cl ai m edm o rt g ag e i nt eres t d educt i o n . Th e l et t er d o es n o ts t at e t h at p et it i on er h adan y i n teres ti n t h e p ro p ert y , l eg al , equ i tab l e, o r o t h erwi s e, b y reas o n o f h i s p aym en t s . W i t ho u t b an k
s t at em en t s , recei p ts , o t h er reco rd s , o r t es t i m o n y fro m p et it i on er o r M s . Fu rn ey t o
s h o w th atp et i t i o n er t ran s ferred an y am o u n ts t o p ay

th e m ort g ag e o r t h at h e h adan equ it ab l e i n t eres ti n th e p ro p ert y , we d ecl i ne t o fi ndth atp et i t i o ner h as carri edh i s b u rd en . To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t eredfo r
res p o nd en t as t o the d efi ci en cy an d fo r p et i ti o n er as t o th e accu racy rel at edp en al t y

u n der s ect i o n 6 6 6 2 (a).