This sounds very much like a USTC case I read about a while ago.  I'll see if I can pull that up and give you the citation.

Essentially, it's about a guy in NY who owned two apartments in a condo.  If I remember, for a time, he allowed his son along with his wife (and perhaps their young kids) to stay in the second apartment as their home.  They subsequently moved out and he never got around letting that vacant unit out.

Eventually, both units were sold (or may be one) and he argued that he had been using that second apartment as part of his home, that he had plans to knock down some walls to connect the units although it was never done, etc.

The court didn't feel that his position has legs to stand on and denied him the tax benefits because it considered those to be separate dwelling units.  I can't recall all the details but it's something along that line.

[Edit: Turns out to be a district court case]