Margaret Hancock - Page 16

               Respondent contends that petitioner intended to hold the                
          lots for investment until the real estate market improved, and               
          that petitioner was not in the business of selling or developing             
          real estate because she was not developing properties and was not            
          looking for development opportunities.                                       
               We disagree.  Petitioner began selling the 48 lots as soon              
          as she received them from Hancock Enterprises.  This suggests                
          that she was not holding them for investment.  The fact that                 
          sales occur in the course of a liquidation neither compels nor               
          forecloses a finding that property was held primarily for sale in            
          the ordinary course of a trade or business.  See Ehrman v.                   
          Commissioner, 120 F.2d 607, 610 (9th Cir. 1941), affg. 41 B.T.A.             
          652 (1940) and Heller v. Commissioner, 41 B.T.A. 1020 (1940); Van            
          Bibber v. Commissioner, T.C. Memo. 1985-344.  We disagree with               
          respondent's contention that petitioner did not hold the lots for            
          sale because she was not in the real estate development business.            
          Even if petitioner was not developing real estate, she was in the            
          business of selling lots to customers.                                       
               Respondent contends that petitioner did not devote much time            
          or effort to selling her lots, and that she did not advertise or             
          use real estate agents or salespeople.  Respondent also contends             
          that the fact that petitioner borrowed office space at Mark's                
          place of business shows that she was not operating a real estate             

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