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

P owned property at Martha's Vineyard which he used as a summer residence for a number of years. P then ceased to use the property as a summer residence in 1967 and immediately offered it for sale without attempting to rent the property. The property was part of Seven Gates Farm Corporation, and legal title to the property was held by the corporation of which P owned 3%. The leasing arrangement that P had acquired by devise from his father treated P as the defacto owner of the property. No stockholder-lessee could sell his stock and lease without prior consent of 75% of the stockholder-lessees. Also, rentals of a year or less required the prior consent of the Committee on Admissions and a lease for more than one year required 75% stockholder-lessee approval. When P decided to sell, he put a price of $150,000 on the property which was substantially higher than current market values, but P believed that the house would appreciate in value and that eventually, he would get his price. After it was put on the market the summer home was never again used as a residential property. P did go each spring to get the house ready for showing and closed the house each fall, but each of those trips only lasted 2-3 days. P made no attempt to rent the house. An offer was made in 1968, but 75% approval could not be obtained. Eventually, the house was sold in 1973 and P then showed a long-term capital gain of $100,536.50 as a result of the sale.

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