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property from his previous construction activity, and respondent
tests for the existence of a trade or business using a number of
factors relevant to real estate dealers. See United States v.
Winthrop, 417 F.2d 905, 910 (5th Cir. 1969). We find that the
controlling factor in this case is the extent to which petitioner
developed the East Lyme property.
Petitioner did not purchase the East Lyme property with the
intent of holding it as an investment. Rather, his intent was to
increase its value by personally constructing a house on it and
selling it for a profit. In this case, the fact that he hired a
real estate agent to help him sell the property emphasizes the
point that the profit which he sought flowed from his
construction work, not his ability to buy and sell real estate.
The facts of this case are comparable to those in Heebner v.
Commissioner, 280 F.2d 228, 233 (3d Cir. 1960), affg. 32 T.C.
1162 (1959), in which the Court of Appeals for the Third Circuit
found that--
the sale of real estate here was but one aspect of the
entire transaction. There is absolutely no reason for
treating the profit from the building transaction here
any differently because one small aspect of it involved
a sale of land. The land under this factual pattern
was merely another commodity, such as lumber, steel and
bricks, which went into the finished product * * *
In Heebner, the taxpayer husband, an architect and builder,
engaged in package building5 to get his "foot in the door as a
5 A package builder not only undertakes the construction
of a building but also arranges for the design, location, and
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