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1483, 1488 (11

th Cir. 1985), affg. in part and revg. in part T.C.

Memo. 1981-361

.

Petitione

r and Mrs. Wood did not make frequent sales of

property. Ove

r the 20-year period that included 1977 through

1996, petition

er and Mrs. Wood sold four properties that they

owned--the Vir

ginia house in 1977, the North Carolina property in

ordinarily bel

‘for investmen

sale.’” Major

  • -

    30 -

ies the contention that the property is being held

t’ [or for personal purposes] rather than ‘for

Realty Corp. & Subs. v. Commissioner, 749 F.2d

Jersey house in 1994, and the Florida house in

1989, the New

1996.

The

infrequency of sales i

s highly probative th

at the

propertie

s were held for person

al or investment reas

ons rather

than for

sale.

We

conclude

tha

t the residences, the

vacation

propertie

s, the undeveloped lan

d in Florida, and the

partnership

interest

in MSPR, Ltd., were no

t properties purchase

d or held for

sale to c

ustomers.

We

find

tha

t petitioner and Mrs.

Wood were

not real

estate dealers and hol

d, therefore, that th

e disallowed

amounts a

re not business expens

es deductible under s

ection 162.

B.

Loss on Sale of Flori

da House

Peti

tioner claimed an ordi

nary loss on the fore

closure of

the Flori

da

house

in

1996.

Sec

tion 165(a) allows a

deduction for

any loss

sustained during the t

axable year that is n

ot

compensat

ed for by insurance or

otherwise. However,

in the case

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