Answer and Explanation:
The tax memo is as follows
Tax memo
From: Tax Advisory
Specific issue: the case here addresses Taxpayer A deduction of interest expenses for the period 2009 in which taxpayer A filed taxes
Facts : taxpayer A realized interest in mortgage amounting to $8500 which is owed to Weak National Bank. Taxpayer A applied for a loan with same Weak national bank for settlement of mortgage loan interest of $8500
Conclusion: Taxpayer A can not get deduction of interest expense on loan in weak bank for 2009 tax returns. This is because taxpayer A applied for loan with Weak bank and paid with cheque from same bank in which mortagage interest was owed in settlement of debt interest, and as such cannot qualify for deduction
Cash basis tax payers can report tax deductions in year in which they payment is made in cash