7
speculation and receives rentals therefrom is not a real estate
dealer. Id.
Whether property is held by a taxpayer for sale to customers
in the ordinary course of the taxpayer's business or for another
purpose is a question of fact, and each property must be
considered on an individual basis. Cottle v. Commissioner, 89
T.C. 467, 486 (1987). In this analysis, courts have applied
various factors including: (1) The taxpayer's purpose for
acquiring the property and the duration of ownership; (2) the
number, frequency, regularity, and substantiality of the sales;
(3) the taxpayer's efforts, including advertising, to sell the
property; (4) the extent of developing and improving of the
property to increase sales; and (5) the taxpayer's time and
effort devoted to sales. United States v. Winthrop, 417 F.2d
905, 910 (5th Cir. 1969); Cottle v. Commissioner, supra at 487.
These factors serve to guide the decision but none is necessarily
of controlling significance. Cottle v. Commissioner, supra at
488.
Applying these factors, we find that petitioners acquired
and held the Pillsbury and Lyndale properties as investments.
The purpose for acquiring the Eden Prairie property is not clear
from the record; however, petitioner testified that he held it
for investment beginning in 1990. In contrast, petitioner
testified that when acquiring the St. Paul property he intended
to resell it immediately after purchase. However, the existence
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