Loren F. Paullus and Donna Paullus - Page 33

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               Finally, Ridgemark sold eight parcels of land in a 12-year             
          period between 1977 and 1989.  By comparison, only one                      
          significant purchase of property was made subsequent to                     
          Ridgemark’s 1971 formation (Bushmont property in 1985).                     
               Accordingly, Ridgemark fits the pattern of infrequent but              
          substantial sales of property which indicates, generally, that it           
          was held for investment purposes.  See Bramblett v. Commissioner,           
          4.  The Extent of Subdividing, Developing, and Advertising To               
          Increase Sales                                                              
               Respondent asserts that Ridgemark routinely subdivided and             
          incurred substantial improvement costs before selling the land to           
          either Construction or Financial.  Also, respondent contends that           
          the fact that Ridgemark recorded final subdivision maps on                  
          certain property before the sales were complete demonstrates that           
          it was involved in the business of dealing in real property.                
               The seven sales of real property during the 12-year interval           
          between 1977 and 1989 can be divided into two categories:                   
          (1) Three sales of large unsubdivided parcels, and (2) four sales           
          in which the title to the property could not be transferred                 
          without a new map being recorded to create a separate legal                 
          parcel.5  Ridgemark contends that the recordation of a final map            

               5 See Cal. Govt. Code sec. 66426 (West Supp. 1996), which              
                    A tentative and final map shall be required for                   
               all subdivisions creating five or more parcels, five or                

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