Lowry v. United States

Edward G. Lowry, Jr. (plaintiff), an experienced real estate investor and de facto owner of a Martha's Vineyard summer home (legal title held by the Seven Gates Farm Corporation), decided in 1967 he no longer needed the home and immediately listed it for $150,000 despite its then-fair-market-value of only $50,000, anticipating a coming price surge; he returned only seasonally to open, maintain, and close the property (never for personal vacation use, aside from one annual corporate shareholders meeting), and deliberately chose not to rent it, believing an unfurnished, ready-to-show home would sell faster and that furnishing for rental was financially impractical, compounded by the corporation's rental restrictions. The property sold in 1973 for $150,000, and after the Commissioner disallowed Lowry's 1970 deduction of maintenance expenses on the ground the home remained a personal residence, Lowry paid the resulting tax under protest and sued to recover it.