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business and whether petitioner held the club memberships
for sale to customers in the ordinary course of that trade
or business. See Bramblett v. Commissioner, 960 F.2d 526
(5th Cir. 1992); Buono v. Commissioner, 74 T.C. at 205.
Petitioners survey the factors used by courts to
distinguish between dealers and investors in real estate
and conclude that "clearly, Lemons' activities do rise to
the level of a trade or business." In analyzing these
factors, petitioners take into account all of the
activities of the joint venture in developing, improving,
and selling the property. Respondent, on the other hand,
applies the same factors and concludes that petitioner was
not engaged in a trade or business. In coming to this
conclusion, respondent draws a sharp distinction between
petitioner and the joint venture and takes into account
only petitioner's individual actions with respect to the
club memberships but not his actions with respect to any
other aspect of the development of the Moonlight Beach
property.
The premise of respondent's argument appears to be
that in evaluating whether petitioner was engaged in a
trade or business for the purpose of applying section
1221(1) the Court should look only to the activities
petitioner undertook after he acquired the club memberships
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