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of real estate through a third-party real estate agent. In
addition, petitioners surely realized that they would incur
mortgage interest expense prior to the resale of the Palm Springs
House. Any possible profit would have been eroded, if not
eliminated, by such expense. Under these circumstances, we find
that petitioners did not obtain the Palm Springs House with the
expectation that they could benefit from a possible appreciation
in its value.
Our examination of the relevant profit motive factors
delineated under section 1.183-2(b), Income Tax Regs., leads us
to conclude that although petitioners "hoped" for some profit,
they did not have the requisite profit motive to claim a loss
under section 165(c)(2).
Rather, we agree with respondent that petitioners' primary
motive in purchasing the Palm Springs House was to get one step
closer to moving to Missouri. We are persuaded by respondent's
argument that petitioners were eager to move to Missouri for
semiretirement, that they anticipated some difficulty in selling
the Thousand Palms Property, and that the sale/exchange with the
Norrises for a single-family home enabled them to: (1) Move to
Missouri, and be left with the less onerous task of selling a
single-family home in a more populated area; and (2) obtain the
additional cash required for their purchase of the Missouri
Property.
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