Taiyo Hawaii Company, Ltd. - Page 40

                                       - 40 -                                         

          Petitioner's trade or business consisted of real estate activity            
          in Hawaii.  It acquired, undertook to develop, and held                     
          properties, including the Ginter and Gomes properties, for sale             
          to customers in the ordinary course of its real estate                      
          development business.  We cannot make the type of distinction               
          petitioner makes between the Ginter and Gomes properties and the            
          other properties held by petitioner.  Petitioner's sales activity           
          was generally sporadic and occurred in large amounts (in the                
          millions of dollars).  The sales occurring in the years under               
          consideration were no different from the Ginter and Gomes sale in           
          1995.  Although petitioner decided that further development was             
          not warranted, the Ginter and Gomes properties were held for sale           
          and were sold to the first bona fide offeror.                               
          Section 6651(a) Addition to Tax                                             
               Respondent also determined that petitioner is liable for an            
          addition to tax for 1991 under section 6651(a)(1) for its failure           
          to file a timely return.  Section 6651(a)(1) imposes an addition            
          to tax of 5 percent of the tax due for each month a return is               
          delinquent, not to exceed 25 percent.  The addition does not                
          apply if the failure to timely file is due to reasonable cause              
          and not due to willful neglect.  Sec. 6651(a)(1).  Petitioner               
          filed its 1991 return past its due date and has failed to show              
          that its failure to file a timely return was due to reasonable              







Page:  Previous  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  Next

Last modified: May 25, 2011