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Furthermore, petitioner Mr. Taylor was not the listing agent
on the sale of the Palm Springs House. Rather, petitioners moved
to Missouri immediately after the purchase of the house and
listed their house with another real estate agent. Thus, even if
petitioner Mr. Taylor possessed any expertise in the residential
real estate activities, he did not utilize the same in the resale
of the Palm Springs House.
We also believe that petitioners did not obtain the Palm
Springs House with the expectation that it might appreciate in
value. Petitioners contend that they expected to make a quick
profit from the sale of the Palm Springs House. Petitioners
purchased the Palm Springs House at a reduced price of $460,000
after the house had been on the market for 4 months. This price
was $69,000 less than the price at which it was listed.
Petitioners maintain that they were not aware of any decline in
the real estate market at the time of their purchase of the Palm
Springs House, yet they were not alarmed that the Norrises had
been unable to sell the house during the 4-month listing period
or that they were willing to accept such a reduced price.
Petitioners claim that they hoped to make a "quick" $60,000;
i.e, a 13 percent, profit. We think that petitioners could not
realistically have had such expectations. There is no reason to
surmise that petitioners were unaware of the costs, sometimes
exceeding 10 percent of the sales price, associated with the sale
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