Several years ago, Carol Mutter, a cash-basis taxpayer, obtained a mortgage from Weak National Bank to purchase

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Several years ago, Carol Mutter, a cash-basis taxpayer, obtained a mortgage from Weak National Bank to purchase a personal residence. In December 2009, $ 8,500 of interest was due on the mortgage, but Carol had only $ 75 in her checking account. On December 31, 2009, she borrowed $ 8,500 from Weak Bank, evidenced by a note, and the proceeds were deposited in her checking account. On the same day, Carol issued a check in the identical amount of $ 8,500 to Weak Bank for the interest due. Is the interest expense deductible for the 2009 tax year? Prepare (in good form) a research memorandum to the file.
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Federal Tax Research

ISBN: 9781285439396

10th Edition

Authors: Roby Sawyers, William Raabe, Gerald Whittenburg, Steven Gill

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