Margaret Hancock - Page 20

          Hancock Enterprises had stopped building homes around 1982 or                
          1983.  Second, the fact that Mark Hancock used the "Camelot                  
          Homes" name does not show whether petitioner was still in the                
          trade or business of selling lots to customers.                              
               Respondent contends that the fact that petitioner and her               
          husband held the lots for sale to customers through Hancock                  
          Enterprises does not mean she held them for sale to customers in             
          1993 and 1994 because (a) Hancock Enterprises began to hold the              
          lots as an investment when it abandoned its plans to develop them            
          around 1983 and decided to hold them until market conditions                 
          improved, and because (b) Hancock Enterprises' holding purpose is            
          irrelevant in deciding petitioner's holding purpose.  We                     
          disagree.  First, Hancock Enterprises did not abandon its efforts            
          to sell its lots.  Hancock Enterprises had about 115 lots when it            
          stopped building homes in 1982 or 1983, but it had only 48 lots              
          when it liquidated at the end of 1986.  This shows that Hancock              
          Enterprises actively sold lots after it stopped building homes.              
          See Suburban Realty Co. v. United States, supra at 184 (the court            
          did not view the fact that the taxpayer stopped its development              
          activities and had fewer sales several years before the years at             
          issue as establishing that the taxpayer changed its holding                  
          purpose).  Second, we may consider the holding purpose of Hancock            
          Enterprises in deciding why petitioner held the lots.  See                   
          Parkside, Inc. v. Commissioner, 571 F.2d 1092, 1096 (9th Cir.                

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