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31, 1987.2 The sole issue for decision is whether the gain that
petitioner realized on the sale of land during the taxable year
in issue constitutes unrelated business income subject to Federal
income tax under section 512(a)(3)(A) or income that qualifies
for nonrecognition treatment under section 512(a)(3)(D).
Background
This case was submitted fully stipulated pursuant to Rule
122. The stipulation of facts and attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioner maintained its principal place of business
in Oglesby, Illinois.
Petitioner operates a country club providing recreational
and social activities, including, but not limited to, golf,
swimming, and tennis. In 1976, petitioner purchased two tracts
of land consisting of 48.1 and 40.8, acres respectively.
Petitioner used the 48.1-acre tract as a 9-hole golf course and
the 40.8-acre tract as a fishing property. Petitioner continued
to use the fishing property in the performance of its exempt
function from 1976 to 1981.
2We note that although the first page of the notice of
deficiency issued to petitioner identifies the tax period as the
taxable year ended Oct. 1, 1987, the petition filed herein
includes an allegation that the tax period in dispute concerns
petitioner's tax year ended Oct. 31, 1987. Respondent admits
this allegation in her answer.
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