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In effect, petitioners are arguing that between the time
they purchased the property and the time they purportedly
transferred the property to the Trust, their intent for holding
the property changed. The evidence does not establish any such
change in petitioners’ intent. The property was never rented nor
otherwise changed by petitioners to income-producing property.
See, e.g., Newbre v. Commissioner, T.C. Memo. 1971-165.
The stated purpose for the purported 1995 sale of the
property by petitioners to the Trust was to prevent petitioners’
former contractor from obtaining the property on which
petitioners still intended to build their personal residence.
Petitioners’ intent to build their personal residence on the
property did not change at any time between petitioners’ 1992
purchase of the property and petitioners’ purported 1995 sale to
the Trust, or thereafter.
Petitioners are not entitled to the capital loss carryover
deductions claimed for 1998 and 1999.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011