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utility installation, or roadway improvements required by the
town of Monument in connection with the development of the
property. Despite JCLC’s obligation under the agreement, Triview
completed all development work with respect to the Jackson Creek
property.
Vision Development Corp. (Vision) was organized during 1996
by petitioner, petitioner’s brother, and Oldach, with the same
ownership interests as that of JCLC of 40 percent, 40 percent,
and 20 percent, respectively. On January 5, 1998, JCLC conveyed
a 46.5-acre portion of Jackson Creek to Vision in exchange for
$1,571,145. JCLC’s 1998 partnership return reflected a long-term
capital gain of $47,319 with respect to this transaction, and
petitioner reported his distributive share of the gain on his
1998 personal Federal income tax return. Vision was organized to
develop the 46.5-acre parcel for resale to Keller Homes (Keller).
Keller, a home builder, was originally interested in buying the
same parcel from JCLC. Keller was not interested in purchasing
the 46.5-acre parcel unless it was developed and suitable for
residential home building. After Elite expressed no interest in
developing the parcel for Keller, Vision was formed to perform
the development work and resell the property to Keller.
Despite terms in the contracts prescribing that JCLC was to
be responsible for some development activities, Triview completed
all infrastructure development work that was performed on each
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