the $95,000 mortgage balance. The residence was located in a
popular winter vacation area. No business analysis or plan was
prepared by petitioners, who did not have any experience in the
rental property business. Petitioners did not consult with their
accountant in connection with the purchase or operation of their
Tahoe property. Petitioners, on their joint income tax returns
for 1983 through 1988, claimed losses ranging from a low of
$16,107 to a high of $21,385, with an average of $19,066
attributable to their Tahoe residential property. Those losses
resulted from the excess of claimed deductions for maintenance,
interest, taxes, and depreciation over rental receipts. The
annual rental receipts for the period ranged from a low of $300
to a high of $1,238, with an average of $711.
Petitioners did not place the Tahoe property with a real
estate agent for rental purposes or consult with their accountant
in connection with their investment in the Tahoe property.
Petitioners did not keep separate records for the Tahoe property,
and their only attempts to advertise its rental availability were
to post flyers at the hospitals where they practiced medicine.
Petitioners, on occasion, spent winter weekends at the Tahoe
property. They did not use the property off-season (e.g., during
the summer).
(1) Manner in which the taxpayer carries on the activity.
Attempts to publicize the rental property were insignificant.
Petitioners did not prepare a written business plan prior to
their purchase of the Tahoe property. No separate books and
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