TAX COURT OPINION

Case: William Francis & Elizabeth Ann Broderick
Docket Number: 1417-11S
Judge: Kroupa
Opinion Type: bench
Filed: 12/29/2011
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 RMM WILLIAM FRANCIS & ELIZABETH ANN BRODERICK, Petitioners, Docket No. 1417-11S COMMISSIONER OF INTERNAL REVENUE, Respondent. O R D E R Pursuant to Rule 152 (b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit the to petitioner and to respondent a copy of transcript of the above case before Judge Diane L. Kroupa at San Antonio, Texas, on December 14, 2011, containing her oral the proceedings of the pages of findings of fact and opinion. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Diane L. Kroupa Judge Dated: Washington, D.C. December 29, 2011 SERVED Dec 30 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 Bench Opinion by Judge Diane L . Kroupa Broderick v. Commissioner Docket No. 1417-11S December 14, 2011 THE COURT HAS DECIDED TO·RENDER ORAL FINDINGS OF FACT AND OPINION IN THIS CASE AND THE FOLLOWING REPRESENTS THE COURT'S ORAL FINDINGS OF FACT AND OPINION. THESE O RAL FINDINGS OF FACT AND OPINION SHALL NOT BE RELIED LTPON AS PRECEDENT IN ANY OTHER CASE. This proce ding was heard as a small tax case pursuant to the provisions of section 7463 and Rules 170 through 175. This bench opinion is made pursuant to the authority granted in section 7459 (b) and Rule 152. All section references are to the Internal Revenue Code as amended and in effect for 2008, and all Rule references are to the Tax Court Rules of Practice and Procedure. Petitioners appeared on their own behalf. Bryan Dotson appeared on behalf of respondent . Respondent determined a $399 Federal income tax deficiency against petitioners for 2008. The sole issue for decision is whether petitioners are entitled to deduct student loan interest paid on behalf of their children in 2008. We hold that they are not. Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FINDINGS OF FACT Certain faOts are stipulated. The stipulation of facts the supplemental stipulation of facts, and the accompanying exhibits are incorporated by this reference. P titioners resided in Texas at. the time they filed the.petition with the Court. Petitioners' three children, Mark Broderick, Mathew BroÈerick and Marilyn Broderick, took out student loans to pay for their college education at Texas A&M ·University. Petitioners paid all of their children's student lòan payments in 2008 even though petitioners were not legally obligated to make the payments. Petitioners filed a Federal income tax return for 2008 and laimed $1, 331 of student loan interest on the return. Respondent issued petitioners a deficiency notice for 2008 disallowing the student loan interest. claimedl. Petïtioners filed a timely petition for redeter ination with this Court. OPINION We are asked to decide whether respondent properly denied peti ioners the student loan interest they claimed for 2008. We begin with a fundamental principle of tax litigation. The Commissioner's determinations are g nerally presumed correct, and the Heritage Reporting Corporation (202) 628 4888 1 2 3 4 5 6 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 taxpayer bears the·birden of proving that those determinations are erroneous . Rule 142 (a,) . A taxpayer may deduct . int erëst paid on a qualified educationa loan. Sec. 221(a) . A qualified educational loan is indebtedness incurred by the taxpayer solely to p ty qualified higher education expenses of'the t·axpayer, the taxpayer's spouse, or a dependent of . the t axhayer . Se c . 2 21 (d) (1) . The st udent loans on whiâh petitioners paid interest were incurr d by petitioners ' children, .not petitioners. Moreover, petitioner's paid their children's student lóan payments without any legal obligatiön to do so and only based "on a personal moral obligation to their children. Accordingly, petitioners did not pay interest on a qualified educational loan in 2008. While it is admirable thati petitioners helped pay for their childr n's college education,. we hold petitioners are not ntitled to the student loan interest claimed for 2008 because the student loans were in the children s names, not in the parents ' names . To reflect the foregoing, decision»will be entered for respondent. THIS CONCLUDES THE COURT ' S ORAL FINDINGS OF FACT AND OPINION IN HIS CASE Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Whereupon at 10 : 3 9 a . m. , . the bench opinion in the above-entitled matter was concluded.) 6 . . . / Heritage .eporting Corpokation (202) 628-4888