Redisch v. Commissioner

In April 2004, Robert and Pamela Redisch (plaintiffs) purchased a condo in the oceanfront Hammock Dunes community. The Redisches used the property as a seasonal home, often staying there with their daughter. However, following their daughter’s death in 2006, the Redisches could no longer bear to use the property. In 2008, they removed most of their personal belongings and hired Hammock Dunes Real Estate Company (realty company) to rent the property out. Robert testified that he entered a one-year contract with the realty company around April 2008. At that time, Hammock Dunes was still under development. Although the Redisches were not paid to keep their condo available as a model, it was often shown to potential buyers as such. However, potential buyers were informed that the property was available for rent, and it was featured in the realty company’s rental portfolio. Ultimately, the Redisches received only two rental inquiries, and neither panned out. In June 2009, they listed the property for sale with a different realtor while still hoping to rent it. On their 2009 and 2010 federal tax returns, the Redisches claimed deductions related to the property. The commissioner of the Internal Revenue Service (defendant) disallowed the deductions under § 212, asserting that the property had not been converted to an income-producing use. The Redisches petitioned the tax court for a redetermination.