- 7 -
Newcombe v. Commissioner, 54 T.C. 1298, 1300-1301 (1970), the
Court set forth a number of factors to be considered to determine
whether a personal residence had been converted to property held
for the production of income. In the case at bar, the relevant
factors are: (1) Petitioners actually occupied the Belair
property as their personal residence; (2) the Belair property was
not occupied from the time petitioners moved out of it until its
subsequent sale and therefore was potentially available to
petitioners for their personal use throughout this period; and
(3) the Belair property was unavailable for rent, due to the
renovation, and by the time petitioners could have rented the
Belair property they had decided “to get rid of” the Belair
property.7 Id.; Henry v. Commissioner, supra.
Merely offering the property for sale does not necessarily
convert it into property held for the production of income.
Newcombe v. Commissioner, supra at 1301. Placing property on the
market for immediate sale, at or shortly after the time it is
abandoned as a residence, will ordinarily be strong evidence that
a taxpayer is not holding the property for postconversion
appreciation in value. Id. at 1302. Under such circumstances,
only a very exceptional situation will permit a finding that the
7 Furthermore, even if petitioners had attempted to rent
the Belair property, as they claimed, unsuccessful efforts to
rent property have been held to be insufficient to accomplish a
conversion. Gevirtz v. Commissioner, 123 F.2d 707 (2d Cir.
1941); Grammer v. Commissioner, 12 T.C. 34, 37 (1949).
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011