Lucian T. Baldwin, III - Page 34




                                       - 34 -                                         
          concerned.  The only person with resort management experience               
          whom petitioner apparently consulted visited Granot Loma once and           
          merely opined that the property might be used as a resort                   
          property without any apparent analysis of the pertinent financial           
          data and without the benefit of any market study into the                   
          feasibility of operating such a resort profitably.                          
               Petitioner has conceded that Granot Loma was never operated            
          as a commercial resort and that only invited guests stayed there            
          during the years at issue.  In testimony at trial, that                     
          concession was explained, at least in part, by the admission that           
          petitioners did not want to open Granot Loma to uninvited guests            
          because it would interfere with their use of the property.  The             
          evidence also suggests that, during the years at issue, LFI did             
          not have the licenses and permits to operate a commercial                   
          facility required under Michigan State law, that Granot Loma was            
          not insured for business use, and that LFI did not file State               
          liquor tax returns or collect sales tax on its purported gross              
          receipts.  Although petitioner vociferously proclaimed throughout           
          the trial that LFI operated Granot Loma for profit and was a real           
          business, LFI did not take even the most minimal of steps under             
          Michigan State law to make its alleged rental activity function             
          like a real business.                                                       
               Petitioner argues that LFI made changes in its operation of            
          Granot Loma to foster profitability.  The principal change he               







Page:  Previous  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  Next

Last modified: May 25, 2011