- 34 -
and in the April 25, 1986, written agreement.24 We conclude that
the acquisition of the 40 acres in the names of Briggs and
Daniell, on the same date that Towers Development acquired the
phase I land from the same seller, and the disposition of the 40
acres about a year later were part of a preconceived, tax-
motivated plan by the joint venture to avoid ordinary income
treatment of gains realized from appreciation of the 40 acres as
phase I of Gulf Highlands progressed. See Boyer v. Commissioner,
58 T.C. 316, 324 (1972); cf. Ackerman v. United States, 335 F.2d
521 (5th Cir. 1964).
A joint venture conducting a business operation is taxable
as a partnership unless it is a trust, estate, or association.
See sec. 301.7701-3(a), Proced. & Admin. Regs. Here, the joint
venture was not a trust or estate and had not elected to be taxed
as an association; therefore, it is taxed as a partnership. See
id.; see also sec. 761(a) (the term “partnership” includes a
24 On direct examination, Mr. Morris testified as follows:
Q. What was your intent with respect to this property–-
this 40 acres that you acquired with Mr. Briggs and Mr.
Daniell? What were you going to do with the property?
A. We was [sic] going to develop it out into townhouses
and commercial property.
Q. Were you planning to develop it in your own name or as
a joint venture?
A. As a joint venture.
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