Donald L. Head - Page 7

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          of the property to a trade or business or profit-motivated use.             
          See McBride v. Commissioner, 50 T.C. 1, 7 (1968); Leslie v.                 
          Commissioner, 6 T.C. 488, 493 (1946).                                       
               Petitioner's coin and stamp business was not conducted on the          
          Jensen Road property, nor was the property used in connection with          
          that business.  Moreover, petitioner did not terminate his personal         
          use of the property before or after obtaining the loan.  Petitioner         
          and Ms. Head resided in the Jensen Road house for more than 2 years         
          prior to obtaining the loan. They continued residing there during           
          the operation of petitioner's business, and even after petitioner's         
          business failed.  Further, the proceeds from the bank loans were            
          not used strictly for business purposes; a portion of the proceeds          
          was used for personal expenditures.                                         
               To conclude, the Jensen Road property was neither an                   
          investment nor business property at any time after October 1980.            
          Accordingly, petitioner's 1986 foreclosure loss was personal and is         
          not deductible under section 165(c).                                        
          Issue 2.  Dependency Exemption                                              
               The second issue for consideration is whether petitioner is            
          entitled to a dependency exemption for Ms. Ratliff in 1986.                 
          Petitioner has the burden of proving that he is entitled to the             
          exemption claimed. Rule 142(a); Welch v. Helvering, supra.                  
               Section 151(c) provides an exemption for each of a taxpayer's          
          dependents.  Among other things, a taxpayer must provide over half          
          the support of any dependent during the calendar year in order to           
          claim the exemption.  Sec. 152(a).                                          

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