- 26 - ordinary course of its business. Essentially, respondent asserts that the unit 10 property was inventory, and did not qualify for the nonrecognition provision of section 1031. Ridgemark argues that it held the unit 10 property for investment purposes. Consequently, the issue is clearly drawn, and we focus on the characterization of the unit 10 property held by Ridgemark. 1. Nature and Purpose of the Acquisition of the Property and the Duration of Ownership Ridgemark segregated its business of operating Ridgemark Golf and Country Club from the development and sales of lots. Development and sales were placed in separate corporate entities. After the creation of the new corporations, Ridgemark had seven sales of property, excluding the unit 10 property. The sales were made over a 12-year period exclusively to Financial or Construction, the new corporate entities, which developed and sold real property. The one significant acquisition (the Bushmont property) was used to expand Ridgemark Golf and Country Club. Ridgemark also found it necessary to sell some of its real property holdings to finance a new 18-hole golf course and other facilities on the Bushmont property. Ridgemark’s primary activity was the development and operation of golf courses. To that end, it was successful, thereby increasing the value of the facility, including the adjacent real property. Specifically, demand for the lots and residences in Ridgemark Estates was increased by coupling them to the golf and country club memberships.Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Next
Last modified: May 25, 2011