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affd. 218 F.2d 603 (2d Cir. 1955). The District Court pointed
out that the activities with respect to renting the house were
minimal, even though rental continued over a long period of time.
Moreover, activity to rent or re-rent the house was not needed,
and there were no employees regularly engaged for maintenance or
repair. Id.
In Balsamo, the issue was the proper characterization of the
property in question, a single-family residence, that the
taxpayer's husband had purchased before they were married. When
the taxpayer and her husband had married, she signed a prenuptial
agreement. Her husband died 5 months after the wedding. Shortly
after his death, the estate rented the property in question to a
third party. Subsequently, the taxpayer sued to challenge the
prenuptial agreement, and in satisfaction of this suit, she
received the property in question. Within 3 months after
receiving the property in question, the taxpayer sold it to the
third party who had been renting it.
The Tax Court relied on Grier v. United States, supra, to
hold that the taxpayer was not in a trade or business with
respect to the property in question. The taxpayer was a
securities salesperson and secretary, and had little involvement
with real estate. She owned the property in question for a very
short period of time. Her activities with respect to the
property as a rental property were almost nonexistent; even when
the tenant pointed out a few problems, she did not attempt to
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