Loren F. Paullus and Donna Paullus - Page 32

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          526 F.2d 409 (5th Cir. 1976).  Conversely, infrequent sales                 
          resulting in large profits tend to show that property was held              
          for investment.  Bramblett v. Commissioner, 960 F.2d 526 (5th               
          Cir. 1992).                                                                 
               The unit 10 property was sold to Shen for $11,250,000.                 
          Previously, Ridgemark was willing to sell the unit 10 property to           
          Shen for $10 million, which incorporated approximately $1,500,000           
          of offsite improvements, with a $2,563,454 basis.  Consequently,            
          at the sale, Ridgemark received net proceeds of approximately $9            
          million.  This is evidence of long-term appreciation as opposed             
          to normal inventory markup.  We also recognize that Ridgemark’s             
          golf operating revenue is approximately twice the revenue from              
          real estate transactions.  This factor quantitatively reflects              
          that Ridgemark’s primary source of income and business operation            
          was the management of a golf resort facility.  The real estate              
          sales were, at best, peripheral.                                            
               There was a significant difference between the unit 10                 
          property and prior property sales.  Ridgemark incurred costs of             
          approximately $2 million in completing the unit 10 property,                
          compared to about $600,000 expended in connection with the seven            
          parcels that had been sold to Financial or Construction.  Of the            
          $2 million, approximately $1,600,000 was spent for improvements             
          in satisfaction of the Agreement with Shen.  We do not agree with           
          respondent that Ridgemark would have, in any event, made these              
          improvements irrespective of whether Shen completed the sale.               

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