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construction).7 Finally, petitioners had no income from the real
estate activity and substantial income from other sources.
After reviewing all the facts and circumstances, we hold
that the real estate activity was not a trade or business. Even
though Mr. Finnegan devoted time and effort to the real estate
activity, it was not regular and continuous. By so holding, we
need not decide whether the real estate activity was engaged in
for profit. Petitioners, therefore, were not entitled to deduct
any of the additional expenses under section 162. We note that
in so holding we need not decide whether these amounts need to be
capitalized.
In reaching all of our holdings herein, we have considered
all arguments by the parties and to the extent not mentioned
above, we find them to be irrelevant or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.
7 Mr. Finnegan claims that the real estate market hit hard
times after he completed construction of the Acapulco house.
There is no evidence, however, that the market remained poor for
the entire 5 years after he completed construction.
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