- 33 -
that the new purpose was for the production of income. Sec.
1.165-9(b)(1), Income Tax Regs.
Petitioner and Mrs. Wood purchased the Florida lot with the
intent to build their personal residence on it. Petitioner and
Mrs. Wood used the Florida house as their personal residence
until it was sold in 1996. The property was never rented or
otherwise changed to income-producing property. See, e.g.,
Newcombe v. Commissioner, 54 T.C. 1298, 1301-1302 (1970); Newbre
v. Commissioner, T.C. Memo. 1971-165.
In sum, we hold that petitioner is not entitled to deduct
any loss on the foreclosure of the Florida house. We have
considered all of petitioner’s arguments regarding the disallowed
expenses and loss claimed on the property management Schedules C,
and to the extent not specifically addressed, we find them
unpersuasive.
V. Schedule A Itemized Deductions
For 1994, respondent made the following adjustments to the
itemized deductions petitioner claimed on the 1994 return:
1994 Itemized Deductions Per Return Per Exam Adjustment
Medical & dental $1,365 -0- $1,365
Taxes 24,424 $12,456 11,968
Home interest 42,614 6,632 35,982
Contributions -0- 304 (304)
Miscellaneous -0- 6,488 (6,488)
AGI limitation –- (215) (215)
Total 68,403 25,665 42,738
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011