- 11 - that a taxpayer's intention with respect to the use of property is not relevant in determining the applicability of section 512(a)(3)(D). In this regard, the Court of Appeals reasoned as follows: The statute speaks in terms of use rather than intent. Therefore, the Tax Court correctly observed that the Club's various plans for the land were irrelevant. Atlantic Athletic Club, 61 T.C.M. (CCH) at 2019. The analysis must concentrate on the ways in which the Westside Property was or was not "used directly." This process entails factual findings as to the activities that occurred on tracts A and B of the Westside Property, and legal conclusions as to whether those activities constituted sufficient recreational uses by the Club. [Atlanta Athletic Club v. Commissioner, 980 F.2d at 1412.] The Court of Appeals nevertheless reversed our decision after concluding that the testimony and evidence demonstrated that the taxpayer had in fact directly used the property in question in the performance of its exempt function. In particular, the Court of Appeals focused on evidence that it concluded tended to show that the taxpayer conducted various activities on the property in question, including kite flying contests, foot races, and picnics. Id. at 1412-1413. The plain language of section 512(a)(3)(D) limits nonrecognition treatment to gains realized on the sale of property used directly in the performance of the organization's exempt function. Consistent with Atlanta Athletic Club v. Commissioner, supra, we conclude that the plain and ordinary meaning of the phrase "used directly in the performance of thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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