- 17 -
(7) the extent of advertising, promotion, or other active
efforts used in soliciting buyers for the sale of the
property;
(8) the listing of property with brokers; and
(9) the purpose for which the property was held at the time
of sale.
Maddux Constr. Co. v. Commissioner, 54 T.C. 1278, 1284 (1970).
None of the factors are conclusive standing alone, but rather all
of the factors taken as a whole govern. Id.
Respondent correctly points out that section 1221 applies a
different standard than section 1031. See Black v. Commissioner,
35 T.C. 90, 96 (1960). Section 1221(1) excludes from the term
"capital asset" property "held by the taxpayer primarily for sale
to customers in the ordinary course of his trade or business".
(Emphasis added). Unlike section 1221, the qualifying language
of section 1031 omits the phrase "to customers in the ordinary
course of his trade or business". Because section 1031(a)(2)(A)
deals only with property "held primarily for sale," this is the
only requirement for the applicability of the exception to
section 1031. Id.; see Woodbury v. Commissioner, 49 T.C. 180,
197 (1967); Land Dynamics v. Commissioner, T.C. Memo. 1978-259.
In determining whether the Exchange Property was "held
primarily for sale," the factors presented in section 1221 cases,
such as Maddux Constr. Co. v. Commissioner, provide guidance in
making this determination, but we are not concerned with factors
analyzing whether the property was sold "to customers in the
ordinary course of * * * business" or whether the property was
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011