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real estate business, he intended to resell the acquired property
as soon as the circumstances permitted.53 We find, on the
record, and in the absence of proof to the contrary, that
petitioner acquired the property as part of his real estate
business. However, we must decide whether petitioner’s
motivation in holding the property for some time after its
acquisition changed to an investment purpose.
At trial, petitioner testified that he became interested in
putting cows on the Prather Ranch Property, that his “ultimate
plan” was to move cattle to that property for grazing, and that
he had a cattle guard54 installed. Petitioner’s testimony was
subjective and self-serving, and we cannot accept as true his
testimony that he “got in the cow business, because of this piece
of property”. Further, petitioner never moved any cattle to the
Prather Ranch Property,55 and, indeed, he testified that he had
53We also note that the 1982-1983 series of trades and
purchases orchestrated by petitioner and Mr. Schoolfield are
highly indicative of a business acquisition. Through that series
of maneuvers, petitioner was able to acquire a parcel of property
with “good access” and we suspect a property with a higher
probability of resale under favorable circumstances.
54A cattle guard is “a device consisting of a shallow ditch
across which ties or rails are laid far enough apart to prevent
livestock from crossing that is often used instead of a gate at a
fence opening”. Webster’s Third New International Dictionary 354
(1986). Petitioner testified that the cattle guard he installed
was a “huge concrete thing”, which cost $1,600 and weighed about
5,000 pounds.
55Petitioner testified that as he was preparing to move
cattle to the Prather Ranch Property, Mr. Carter “came along and
(continued...)
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