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did not hold such property for investment, based on the entire
record and the facts discussed herein, respondent's argument was
not unreasonable.
Moreover, given that no bright-line test exists for
determining the number of acres a taxpayer may use as his
principal residence, we find that respondent's position, in fact
as well as in law, was justified to a degree that could satisfy a
reasonable person. Although, in Schlicher I, we held that
residential use includes "appreciating nature, living in open
spaces, hiking, horseback riding, grazing cattle, and enjoying
unobstructed views of the countryside," we realize that
reasonable minds could differ with respect to the acreage
allocable to such use. Schlicher v. Commissioner, T.C. Memo.
1997-37.
Thus we conclude, based on the discussion herein, that
respondent's position had a reasonable basis in both law and
fact. Pierce v. Underwood, 487 U.S. 552 (1988). Accordingly, we
hold that respondent's position was substantially justified and
that petitioner is not entitled to litigation costs under section
7430. Petitioner's motion will therefore be denied.
An appropriate order will be issued.
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Last modified: May 25, 2011