WILLIAM C. HORRMANN
17 T.C. 903 (1951)
NATURE OF THE CASE: This was a dispute over a depreciation deduction. The Commissioner
determined that Horrmann (P) could not claim depreciation and expenses on real property, and
that they were not entitled to claim a net long-term capital loss when they sold the
property.
FACTS: P got property by devise from his mother upon her death in 1940. P spent $9,000
fixing up the house and sold his former residence. P then moved into the house and used it
as his personal residence until 1942 at which time he abandoned the house. The property was
sold in 1945 with the net proceeds of the sale to be $20,800. At the time that P got the
property it was worth $60,000 and when abandoned as his residence, the value was $45,000
with $35,000 allocated to land and the balance to the buildings. P considered converting the
property to an apartment house but that was abandoned. P also tried to rent the house as
well and to sell it on numerous occasions. P wanted to take a deduction for depreciation of
the property in 1943, 1944, and 1945 and a deduction for expenses incurred to maintain the
property and a deduction for the long term capital loss that he suffered on the property.
The Commissioner issued a notice of deficiency in income tax to P. P filed a petition with
the court and the court conducted a trial.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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