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builder." The Court of Appeals for the Third Circuit affirmed
the Tax Court's holding that he was not entitled to capital gain
treatment on the disposition of the property because his profit
resulted from the operation of a business. Id. at 234.
Likewise, the general nature of the East Lyme project was
not significantly different from petitioner's previous home
improvement projects. His business was building and selling home
improvements, which in this case involved an entire home. The
fact that the disposition included a plot of land does not
convert the entire finished product into a capital asset.
Moreover, assuming arguendo that petitioner's previous
construction work constituted a separate business because he had
never previously constructed a new home, it is clear from the
facts in this case that petitioner's extensive participation in
the development of the East Lyme property constitutes a business
activity in and of itself.6 His subsequent abandonment of the
construction business and decision to become a full-time airline
pilot is understandable given the personal and financial problems
he experienced during 1990. These events do not serve to
financing of the building so the purchaser is delivered a
completed project, i.e., a package.
6 We have previously held that a taxpayer may treat the
gain or loss from one venture or sale as ordinary income or loss
derived from a trade or business. Morley v. Commissioner, 87
T.C. 1206 (1986).
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