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formed a corporation to develop and improve the property
and assigned his interest in the lease to the corporation.
Id. at 914. The taxpayer reported his share of the gains
realized by the trust upon disposition of the lots as
capital gains. Id. at 915.
The Court held that the taxpayer and the developer
had entered into a joint venture for the purpose of
subdividing, developing, and selling the land. Id. at 916.
Since the activities of the developer and his corporation
constituted a trade or business, the Court found that the
taxpayer, as a member of the joint undertaking, was
similarly engaged and, thus, held the property for sale to
customers in the ordinary course of business. Id. at 917.
Accordingly, the Court held that the income realized from
the venture must be taxed at ordinary rates. Id.
In these cases, petitioner and Mr. Dixon undertook the
improvement of the Moonlight Beach property and the sale
of those improvements to the public in the form of time-
share memberships in the club. In order to obtain
permanent financing for the project, they agreed between
themselves to purchase any unsold club memberships and
continued to market them to the public. In effect, each
of them agreed to continue the activities of the joint
venture in his individual capacity. Respondent concedes
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