-13- of the debt settlement agreement and hold for petitioner.4 H.K. Peach, PNC’s successor, may deduct the entire amount of the eliminated debt, and petitioner, as a 50-percent shareholder of H.K. Peach, may deduct $196,398, or one-half of the entire amount. III. Engaged in a Trade or Business Petitioner argues that his extensive involvement in real estate business ventures places him in a trade or business of developing industrial real estate during the subject years. Respondent maintains that petitioner’s involvement with the real estate has always been on behalf of Arbor. Respondent concludes that petitioner was not personally engaged in a trade or business. We agree with petitioner. Petitioner began his real estate career more than 20 years ago. In 1995 and 1996, he was actively involved in developing the industrial real estate and nursing home businesses, in accordance with the terms of the 1983 Development Agreement. Over the years, petitioner and Pomeroy, alone and sometimes with others, built a number of industrial rental and nursing home rental partnership enterprises. Petitioner personally ran a substantial part of the operations, supervising Arbor’s management activities and the partnerships’ rental activities. 4 On the basis of our holding, we need not and do not discuss petitioner’s alternative argument.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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