X hits on this document

87 views

0 shares

0 downloads

0 comments

32 / 38

  • -

    32 -

business.

Petitioner

and

Mrs.

Wood

retained

ownership

of

the

Florida

house.

They

resided

in

the

house.

They

never

paid

any

rent

to

any

partnership

for

their

use

of

the

house.

And

they

claimed the Florida house as their residence in their bankruptcy

case.

Considering

all

the

facts

and

circumstances,

we

find

that

the Florida house was not property related to, or used in, any

trade or business.

Finally, we note that generally even though people who buy

property for their own residential purposes are interested in

making a potentially profitable purchase, the purchase or

construction of a personal residence is not considered a

transaction

entered

into

for

profit.

The

primary

motive

of

acquiring a family residence brings the purchase within the ambit

of section 262, which provides that “no deduction shall be

allowed

for

personal,

living,

or

family

expenses.”

The

regulations

under

section

165

provide:

“A

loss

sustained

on

the

sale of residential property purchased or constructed by the

taxpayer for use as his personal residence and so used by him up

to the time of the sale is not deductible under section 165(a).”

Sec.

1.165-9(a),

Income

Tax

Regs.

The

regulations

also

provide

that in order to be allowed a loss on the sale of property which

at an earlier time was used as a personal residence, a taxpayer

must show that his purpose for owning the residence changed and

Document info
Document views87
Page views87
Page last viewedWed Dec 07 00:44:24 UTC 2016
Pages38
Paragraphs2521
Words8171

Comments