Dong, et al. v. Comr., T.C. Sum. Op. 2014-4

(petitioners, married couple, received loan from husband's parents to buy principal residence; home equity loan agreement and home equity deed of trust signed in favor of parents; terms were $130,000 loan with interest at 3.5 percent plus prime rate not to exceed 12 percent annual rate; court termed agreement a credit line mortgage and not a purchase money mortgage; petitioners did not record or perfect agreement; under I.R.C. Sec. 163, lender's security interest must be perfected under local law as a prerequisite to claiming mortgage-related deductions; net result was savings of $2,665 in recording tax, about $1,000 in legal fees, but loss of approximately $30,000 of deductible interest).