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the taxes imposed by sections 1 and 3. In general, an
individual who is engaged in the business of selling
real estate to customers with a view to the gains and
profits that may be derived from such sales is a real-
estate dealer. On the other hand, an individual who
merely holds real estate for investment or speculation
and receives rentals therefrom is not considered a
real-estate dealer.
Based on our examination of the entire record before us, we
find that Mr. Blythe acquired and held title to the ten parcels
in question for the purpose of producing rental income from such
parcels. That is exactly what he did, and it is that rental
income which petitioners reported in their 1994 Schedule C. We
also find on that record that Mr. Blythe did not acquire and did
not hold title to the ten parcels in question for the purpose of
selling them to customers with a view to the gains and profits
that might be derived from such sales. Petitioners did not offer
or advertise any of the parcels for sale during 1994 or at any
other time. The lenders who foreclosed upon the ten parcels
during 1994 and 1995 were not customers of petitioners.
On the instant record, we find that petitioners were not
engaged in a business as real estate dealers during 1994, that
the rental payments which they received during that year were not
received by them in the course of such a business, and that such
rental payments are not includible in the computation of net
earnings from self-employment under section 1402. Sec.
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