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to respondent's revenue agent during the audit that
petitioner held the properties for rental. On the basis of
the record in this case, we cannot find that petitioner has
shown that it held real property for sale to customers in
the ordinary course of its trade or business.
Our finding that petitioner did not hold the subject
properties for sale to customers in the ordinary course of
its trade or business is also consistent with the manner in
which petitioner reported its sales of real property for
Federal income tax purposes. As described above, in each
of its returns for the years in issue, petitioner took the
position that all of its sales of real properties consisted
of "property used in the trade or business" as defined by
section 1231(b). That provision specifically excludes,
among other things, "property held by the taxpayer
primarily for sale to customers in the ordinary course of
his trade or business". Sec. 1231(b)(1)(B). Furthermore,
petitioner reported all of its sales as "installment
sales", as defined by section 453(b). Thus, petitioner
took the position in each of the returns in issue that
its sales of real property did not include "dealer
dispositions"; i.e., "Any disposition of real property
which is held by the taxpayer for sale to customers in the
ordinary course of the taxpayer's trade or business." Sec.
453(l)(1)(B). Accordingly, based upon all the facts and
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