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part of the residence, noting that the taxpayer had used some of
this area to conduct helicopter experiments, which detracted from
its characterization as a residence. More importantly, the
taxpayer in Beckwith only regarded the house itself and 5
appurtenant acres as his residence. However, in the instant
case, the petitioner regards and uses all of the Clayton property
as his residence, except for the portion allocated to his
business. At trial, the petitioner repeatedly and unequivocally
testified that he moved to the Clayton premises, because he
appreciates nature, admires unobstructed views of the
countryside, enjoys living in open spaces where he can hike and
ride horseback, and ultimately desires to live the rest of his
life there. We find petitioner's testimony to be credible.
On brief, the respondent relies on Grace v. Commissioner,
T.C. Memo. 1961-252, for the proposition that occasional or
insignificant use of property, such as for storage of business
tools, is not sufficient to determine its character as business
property. In Grace, we found a taxpayer's business use of his
residence to be "insignificant," where he merely stored
construction tools in part of his basement. Accordingly, we held
that an allocation between the business and residential use was
not required for purposes of section 1034(a) nonrecognition.
Respondent, treating the instant case as the converse of Grace,
contends that the petitioner here used the upper, steeply hilled
section of the Clayton property only "insignificantly," and thus
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