Loren F. Paullus and Donna Paullus - Page 31

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          ordinary course of Ridgemark’s business.  Paullus’ daughter also            
          had names of potential purchasers of lots in unit 10.  There was            
          some connection between the unit 10 property and Ridgemark’s                
          sales office.                                                               
               Additionally, Ridgemark concedes that before the sale of the           
          unit 10 property to Shen, it was taking steps to develop and sell           
          the property in the process of liquidating its holdings.                    
          Respondent argues that this made Ridgemark a dealer in real                 
          property when it engaged in preparations to sell the unit 10                
          property prior to its final sale to Shen.  Ridgemark contends               
          that it should not be deprived of its investor status simply                
          because it prepared to sell the land to third parties.                      
               Overall, we believe Ridgemark’s position is supported by the           
          facts.  Ridgemark sought to liquidate its assets so it could                
          maximize the amount of cash and attention it could focus on the             
          proposed Paicines golf and resort facility.  It was contemplated            
          that, if the transaction with Shen was not consummated, Ridgemark           
          would follow the same pattern it had followed in the past.  In              
          other words, Ridgemark would sell the unit 10 property to either            
          Construction or Financial.                                                  
          3.  The Number, Extent, Continuity, and Substantiality of the               
               Courts have generally viewed frequent sales that generate              
          substantial income as tending to show that property was held for            
          sale rather than investment.  Suburban Realty Co. v. United                 
          States, 615 F.2d at 181; Biedenharn Realty Co. v. United States,            

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