Mariorenzi v. COMMISSIONER OF INTERNAL REVENUE, 73-1341.

• Decision Date: 10 January 1974
• Docket Number: No. 73-1341.,73-1341.
• Citation: Mariorenzi v. COMMISSIONER OF INTERNAL REVENUE, 490 F.2d 92 (1st Cir. 1974)
• Parties: Amedeo Louis MARIORENZI and Grace Mary Mariorenzi, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
• Court: U.S. Court of Appeals — First Circuit

490 F.2d 92 (1974)

Amedeo Louis MARIORENZI and Grace Mary Mariorenzi, Petitioners-Appellants, v.COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.

No. 73-1341.

United States Court of Appeals, First Circuit.

Argued January 7, 1974.

Decided January 10, 1974.

Louis J. Vallone, Providence, R. I., for appellants.

John G. Manning, Atty., Tax Div., Dept. of Justice, with whom Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks and Richard W. Perkins, Attys., Tax Div., Dept. of Justice, were on brief, for appellee.

Before COFFIN, Chief Judge, ALDRICH and CAMPBELL, Circuit Judges.

PER CURIAM.

The issue in this tax refund case is whether petitioners, whose investment portfolio includes tax-exempt bonds acquired shortly before and after the incurring of a home mortgage loan, are precluded from deducting the interest payments on that loan.After consideration of the briefs and argument of counsel, we affirm the decision of the Tax Court.T.C.Memo. 1973-141.Upon all the evidence the Tax Court was entitled to find, as it did, that the mortgage loan was made to assist petitioners in their investment program and, in particular, so that they could acquire more tax-exempt bonds as well as carry those earlier acquired.We agree with the Court that Section 265(2) of the Internal Revenue Code would not apply merely because a taxpayer incurred or continued indebtedness at the same time that he held tax-exempt securities.The question in every case is whether the facts establish a sufficiently direct relationship between the loan and the tax-exempts.A...