Cowles v. Commissioner
United States Tax Court
T.C. Memo 1970-198 (1970)
The Cowleses (plaintiffs) listed their house for sale or rental after a job relocation, rejected one low rental offer and had a second one withdrawn, and eventually sold the house years later at a loss; they sought a tax deduction under § 165(c)(2) for a loss from a transaction entered into for profit, but the Commissioner (defendant) denied the deduction because the house, despite being offered for rent, was never actually rented or otherwise appropriated to income-producing use as required by the governing tax regulation.
Whether, under federal tax law, a mere showing that property was previously offered for sale or rental is sufficient to show that the property, prior to its sale, was rented or otherwise appropriated to income-producing purposes.