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advisers; (3) the time and effort expended by the taxpayer; (4)
expectation that assets used in activity may appreciate in value;
(5) the success of the taxpayer in carrying on similar or
dissimilar activities; (6) the taxpayer’s history of income or
losses with respect to the activity; (7) the amount of occasional
profits, if any, which are earned; (8) the financial status of
the taxpayer; and (9) elements of personal pleasure or
recreation. No single factor is determinative. Sec. 1.183-2(b),
Income Tax Regs.
Lot Nos. 128A and 129
In 2002, the cottages on lot Nos. 128A and 129 had been
uninhabitable for several years, and petitioner had no
expectation of renting either cottage. Therefore, petitioner was
not holding lot Nos. 128A and 129 in connection with any activity
for profit.
Petitioner claimed for lot Nos. 128A and 129 cleaning and
maintenance costs and taxes on Schedule E. Generally, no
deduction is allowed for personal, living, or family expenses.
Sec. 262(a). Accordingly, petitioner is not entitled to claim a
deduction for cleaning and maintenance costs.
State and local real property taxes, however, are allowed as
a deduction for the taxable year within which they were paid.
Sec. 164(a)(1). Section 164(a)(1) allows the owner of property a
deduction for real property taxes regardless of whether they were
paid or incurred in a trade or business. See sec. 183(b)(1);
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Last modified: May 25, 2011