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B'Mae's was a good choice to manage the property. B'Mae's,
unlike an independent manager, could spread the costs of
advertisement among other suite owners and B'Mae's itself.
Moreover, B'Mae's, unlike an independent manager, might receive
unsolicited telephone calls about the availability of suites in
the B'Mae's Resort. Finally, B'Mae's, unlike an independent
manager, had access to and familiarity with the property for
purposes of repairs and maintenance of the timeshares. We do not
believe that the conflict of interest suggested by respondent
affects our finding that B'Mae's was petitioner's agent.
On the other hand, the cases on which respondent relies,
Grier and Balsamo v. Commissioner, T.C. Memo. 1987-477, are
distinguishable from this case. In Grier, the taxpayer, a
securities adviser and salesman, inherited a house that had
previously been rented to a single tenant for a period of years,
and the taxpayer continued this arrangement until he sold the
house approximately 12 years later. During the taxpayer's
ownership, he or his agent performed the necessary maintenance on
the house. The District Court held that the house was not
property used in a trade or business. In distinguishing Gilford,
the District Court stated that the most important issue was "the
extent of the regular and continuous activity of management
involved" in the "multiple rental" in that case, which was not
present in Grier itself, which involved a one-family house.
Grier v. United States, 120 F.Supp. 395, 398 (D. Conn. 1954),
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