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The taxpayer must * * * be seeking to realize a
profit representing postconversion appreciation in the
market value of the property. Clearly, where the
profit represents only the appreciation which took
place during the period of occupancy as a personal
residence, it cannot be said that the property was
“held for the production of income.” * * * [Id. at
1302.]
We added: “The placing of the property on the market for
immediate sale, at or shortly after * * * its abandonment as a
residence, will ordinarily be strong evidence that a taxpayer is
not holding the property for postconversion appreciation in
value.” Id.10
This Court has frequently applied the reasoning of one or
both of Jasionowski and Newcombe in rejecting taxpayer arguments
that because a second or vacation home was held for appreciation
(i.e., investment) the taxpayer was entitled to a deduction,
under section 212(2), for expenses incurred to maintain or
improve the property. See, e.g., Ray v. Commissioner, T.C. Memo.
1989-628; Houle v. Commissioner, T.C. Memo. 1985-389; Gettler v.
Commissioner, T.C. Memo. 1975-87. In both Ray and Houle we
denied the deductions on the ground that the taxpayers treated
10 In a concurring opinion, Judge Forrester observed:
The time when the conversion occurred is obviously
the key, and any appreciation prior thereto would not
have grown while the property was being “held for
investment” * * * but while the property was being held
as taxpayers’ personal residence. [Newcombe v.
Commissioner, 54 T.C. 1298, 1304 (1970) (Forrester, J.,
concurring).]
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