- 2 -
Whitehouse's tax matters partner, petitioned the Court to
redetermine respondent's adjustments to partnership items.
Whitehouse's principal place of business was Morristown, New
Jersey, at the time the petition was filed.
After concessions, the remaining issue for decision is
whether proceeds relating to the sale of 28 developed lots are
ordinary income or capital gain.
FINDINGS OF FACT
Petitioner has been a real estate developer for over 30
years and has operated his business through several entities,
including OLS Corp. (OLS), Hamptons Joint Venture (HJV), and
Whitehouse. In 1983, OLS, as a nominee for HJV, acquired 97
acres (Marlboro tract) in Marlboro Township, New Jersey. HJV
subdivided the Marlboro tract into 133 lots. In 1986, HJV
constructed single-family homes on 77 of these lots and sold them
to individual home buyers.
Beginning in 1986, homeowners, dissatisfied with the
workmanship of the homes, filed lawsuits against HJV and
petitioner, and litigation ensued between HJV and Marlboro
Township (i.e., relating to subdivision approval granted to HJV).
As a result, HJV's and petitioner's reputations as home builders
were tarnished, HJV could not get the requisite municipal
approval for further development, and HJV closed its model homes
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011