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Ridgemark's main operations were its golf and country club
activities. By contrast in this case petitioner was in the
subdividing and developing business, choosing to spin off its
fast-food operations to Baker's Burgers, Inc. While petitioner
asserts its rental activities exceeded its development
activities, we do not find support for that assertion in the
record. While petitioner did not record the final map, in 1988
it was ready to be recorded.23 As discussed above, petitioner
had taken substantial steps in the development of the Exchange
Property.
Conclusion
Petitioner has been active as a subdivider and developer of
real estate. It has the burden of proving that when it was
dealing with the Exchange Property it was wearing the hat of an
investor.
Petitioner acquired the Exchange Property to construct
single-family houses for sale. Considering all the factors, we
find that petitioner did not establish its investor status in
connection with its holding of the Exchange Property. While
petitioner presented potential obstacles (high development costs,
slow sales, etc.), it did not establish that it discontinued its
plans to develop the 48 lots in the Exchange Property. At the
23 In a letter by Elkhorn, dated Apr. 11, 1989, it stated
that petitioner was to sign and record the final map before the
exchange. In the end, Elkhorn recorded the final map.
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