Christine C. Deignan - Page 3

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               In December 1988, petitioner purchased her ex-husband's                
          interest in the property for $62,500.  The following spring,                
          construction of the property was completed.  At about the same              
          time, petitioner listed the property for sale with Mel Foster               
          Co., a real estate agency.  After 6 months without success, she             
          listed the property with another real estate agency, Ruhl & Ruhl            
          Realtors, Inc.  In September 1989, petitioner sold the property             
          for $166,000.  Neither before nor since the sale has petitioner             
          participated in the business of building houses or selling real             
               Petitioner filed U.S. Individual Income Tax Returns, Forms             
          1040, for the taxable years 1986 and 1989.  Her 1989 return                 
          contained two Schedules C, Profit or (Loss) From Business or                
          Profession.  The first, relating to her internal medicine                   
          practice, showed gross income of $380,095 and a net profit of               
          $105,629.  The second, which listed her business as "Construction           
          Housing", showed a net loss of $179,596.  Petitioner claimed an             
          overall loss of $73,967 from business activities in 1989, i.e.,             
          the difference between her $105,629 net income from her medical             
          practice and her $179,596 loss from the "business" involving the            
          sale of the house.  She carried back that $73,967 loss to 19861             

          1 Since that claimed $73,979 loss was combined with other                   
          items on petitioner's 1989 return to produce a zero amount of               
          tax, and since, as we hold hereinafter, the carryback was                   
          incorrectly claimed, we need not consider what the correct amount           
          of the carryback would be if it were otherwise allowable.                   

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