Opinion ID: 276638
Heading Depth: 1
Heading Rank: 2

Heading: Interest Expenses of Carlos and Salvador's Motel.

Text: 7 Carlos Marcello and Salvador Marcello, along with two other persons, operated as partners the Town and Country Motel. The Commissioner disallowed certain deductions taken by the partnership and thereby increased the distributive share to Carlos and Salvador. 8 The Tax Court, applying the so-called Cohan 8 rule, found that the partnership was entitled to deductions for interest expenses in the amount of $5,000 for each taxable year ending January 31, 1956, 1957, 1958 and 1959. 9 Specifically, the Tax Court found that the taxpayers did not support their claim for the full amount deducted: 9 While there are a number of loans made by the partnership which actually relate to its business, there is a failure of proof in establishing a connection between a particular interest payment, the loan on which it is being made, and whether or not that loan is connected with the business of the motel. Even as to those loans which were shown to be related to the motel's business, we are unable to ascertain the exact amounts of interest paid during the years involved. 10 We find that the Tax Court made a correct estimate of what interest was attributable to partnership borrowings. 10 11