- 36 - listed "subdivider and developer" instead of "real estate operator and lessor of building" as its principal business activity. Additionally, the evidence shows that petitioner continued its subdividing and developing activities. For example, petitioner continued to build houses on the 20-lot tract in Yucaipa after petitioner allegedly discontinued developing, recording the income from the sale of the houses as ordinary income in 1990, 1991, 1992, and 1993. In regard to these other developments by petitioner, we know that it continued to hold these properties for sale, rather than investment. The record does not substantiate petitioner's assertion that it built homes on existing lots and no longer subdivided raw land into lots. Mr. Baker's mere statements that petitioner intended to discontinue the development business are not enough to change the characterization of the Exchange Property. See Tollis v. Commissioner, T.C. Memo. 1993-63, affd. per curiam without published opinion 46 F.3d 1132 (6th Cir. 1995). Petitioner presented no objective and contemporaneous evidence to establish its change in intent. Considering petitioner's actions, Mr. Baker's health concerns do not persuade us to accept petitioner's conclusion that it stopped its subdividing and developing activities.Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Next
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