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Lowry v. United States

Citation. Lowry v. United States, 384 F. Supp. 257, 74-2 U.S. Tax Cas. (CCH) P9821, 34 A.F.T.R.2d (RIA) 6206 (D.N.H. Nov. 1, 1974)
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Brief Fact Summary.

Plaintiffs sought a refund of taxes paid after not being allowed to take deductions for the care and maintenance of their former summer residence. After using their summer house for several years, they stopped using it and put it on the market for sale, but never attempted to rent it.

Synopsis of Rule of Law.

No deduction shall be allowed for personal, living, or family expenses.


Plaintiffs, husband and wife, live in Peterborough, New Hampshire. On their 1970 income tax return, Plaintiffs deducted expenditures for the care and maintenance of their former summer residence. They claimed the property was held for the production of income. The Internal Revenue Service did not allow the deduction. After the summer house was put on the market, Plaintiffs never used the house as residential property again. It took several years for the house to sale and Plaintiffs never rented it out during that time.


Whether Plaintiffs converted their summer house into income producing property?


Judge Bownes issued the opinion for the United States District Court in holding for the Plaintiffs and finding that they did convert the property into income producing property.


The District Court notes that Plaintiffs gave sound business reasons for failing to rent the property. Further, the decision was based on examining all the facts and circumstances, which showed that Plaintiffs abandoned the home intending to earn profit from it. They never used the house, kept in on the market, and kept it clean and prepared for sale.

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