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Property at a price of $132,500. Petitioners used the cash
obtained from the Thousand Palms Property sale/exchange for the
Missouri Property purchase. Upon obtaining the Missouri
Property, petitioners promptly moved to Missouri.
At about the same time; i.e., immediately after obtaining
the Palm Springs House, petitioners listed the house for sale
with a real estate agent. The list price for the Palm Springs
House was $525,000, but the listing stated that as petitioners
were absentee owners they would accept most offers. In the
interim, petitioners did not offer the Palm Springs House for
rent. The Palm Springs House had never been lived in, and
renting it might have caused a reduction in the value of the
house. In the meanwhile, petitioners incurred mortgage interest
expense on the Palm Springs House mortgage. Petitioners paid the
mortgage interest expense through an escrow account set up by
petitioners at the time of their purchase. Petitioners
established the escrow account for their convenience because they
intended to sell the Palm Springs House immediately.
Petitioner Mr. Taylor was a real estate agent. However, he
used his real estate agent's license in the contracting business
and not in the sales business. He was not the listing agent for
the sale of the Thousand Palms Property or subsequently for the
Palm Springs House. However, petitioners had in the past: (1)
Purchased low cost residential properties in Thousand Palms,
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Last modified: May 25, 2011