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property was not regular or continuous. Petitioner claimed an
itemized deduction for the Property's real estate taxes on his
1990 Schedule A, rather than a business expense on Schedule C.
Petitioner's claim to an ordinary loss is rooted in his
assertion that he was Mr. Grant's active partner in the
Property's development. Petitioner asks the Court to find as a
fact that he and Mr. Grant entered into an oral partnership
agreement in or around June 1989 to develop the Property for
profit, and that petitioner was actively involved in this
partnership. We decline to do so. The fact of the matter is
that petitioner simply has not proven that he was more than a
financier of Mr. Grant's development of the Property. The record
indicates that petitioner's actions were consistent with those of
an investor, rather than a person who was involved in a working
partnership. Petitioner was involved with the Property only
because he had the money, and Mr. Grant did not. But for his
investment of capital, through the form of a loan, we find that
petitioner had no meaningful participation in the Property's
development. Although petitioner testified at trial, in a
somewhat general and vague manner, that he spent time and money
preparing the Property for sale (e.g., by installing carpeting,
drapery, flooring, and doing landscaping), his testimony fails to
persuade us that the Property was not a capital asset in hands.
We hold for respondent on this issue.
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