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to a quick and profitable sale after each business had become
established, rather than with a view to long-range investment
gains.” Id. at 1093 (citing Giblin v. Commissioner, 227 F.2d 692
(5th Cir. 1955)).
In Deely, we found that the taxpayer was not in the trade or
business of developing and promoting businesses. In Deely, the
taxpayer quickly abandoned or sold 11 unprofitable companies. Of
16 profitable companies, he held 7 for more than 13 years, and an
additional 6 entities sold for profit were held from 17 to 39
years. See id. at 1094.
In Farrar v. Commissioner, T.C. Memo. 1988-385, we found
that the taxpayer was in the trade or business of developing and
promoting businesses. In the Farrar case, the taxpayer bought
and sold at least 31 banks and insurance companies, as well as
other businesses and income-producing real estate. He trained
local managers and contemplated selling the businesses to the
local managers as the businesses became viable. For each of the
three businesses involved in the Farrar case, the taxpayer had a
plan aimed at earning a profit through the sale of the business;
he did not acquire or hold the businesses as long-term
investments.
In this case, petitioner was not working for a fee or
commission and did not organize Adult Living Centers with a view
to a quick and profitable sale after the business of the
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