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business of buying and selling real estate, or that petitioner's
Florida condo activity was conducted on a regular and continuous
basis. McManus v. Commissioner, supra. Petitioner failed to
satisfy his burden of proving that the Florida condo activity
rose to the level of a trade or business within the meaning of
section 162. Accordingly, petitioners are not entitled to
deduct, under section 162, any expenses incurred in connection
with the Florida condominium, which they claimed on Schedule C of
their 1991 return. Respondent is sustained on this
determination.
However, section 212 allows as a deduction all the ordinary
and necessary expenses paid during the year for the production or
collection of income, section 212(1), or for the management,
conservation, or maintenance of property "held for the production
of income", section 212(2). Section 167(a)(2) allows as a
deduction a reasonable allowance for depreciation of property
"held for the production of income." The phrase "held for the
production of income" has the same meaning in section 212 and
section 167. Mitchell v. Commissioner, 47 T.C. 120, 129 (1966).
Expenses and depreciation may be deducted only if the property is
held for production of income during the taxable year at issue.
Meredith v. Commissioner, 65 T.C. 34, 41 (1975). Section 1.212-
1(b), Income Tax Regs., provides:
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