This section contains the nature of the case and procedural background.

Cowles (Ps) purchased a home that the lived in from 1958 until June 1964. P was transferred to another location for work, and they put the house up for sale. Not having too much success, Ps contacted another broker to not only list the house for sale but the rent the house as well. In total, Ps received two rental offers. One offer was rejected being that it was too low and the other was withdrawn. The house eventually sold on October 11, 1966, for a price of $26,000. The sale was upside down for Ps as their cost basis was $34,745. Ps claimed the difference as a loss under Section 165(c)(2). D rejected the deduction. P petitioned.

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