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Eline Realty Co. v. Commissioner, 35 T.C. 1, 5 (1960); Tollis v.
Commissioner, T.C. Memo. 1993-63, affd. without published opinion
46 F.3d 1132 (6th Cir. 1995); Planned Communities, Inc. v.
Commissioner, T.C. Memo. 1980-555. Additionally, a capital asset
may be used in a trade or business, but here petitioner argues
that the assets were held for passive investment purposes.
Although the primary purpose for which a taxpayer holds property
may change, it is the primary purpose for which the property is
held at the time of sale that usually determines its tax
treatment. Cottle v. Commissioner, 89 T.C. 467, 487 (1987);
Biedermann v. Commissioner, 68 T.C. 1, 11 (1977). However, we
may consider events over the course of the ownership to determine
the primary purpose for which the property is held at the time of
sale. Suburban Realty Co. v. United States, 615 F.2d 171, 183
(5th Cir. 1980). Whether property is held primarily for sale to
customers in the ordinary course of the taxpayer's trade or
business is a question of fact that is to be determined on a
case-by-case basis. Gartrell v. United States, 619 F.2d 1150,
1153 (6th Cir. 1980); Guardian Indus. Corp. v. Commissioner, 97
T.C. 308, 316 (1991).
Petitioner's predecessor, Fudosan, acquired the Ginter and
Gomes properties between 1973 and 1980 with the express intention
of developing and selling them as residential properties.
Fudosan obtained a change in the zoning classification from
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