- 20 - Respondent contends that no legitimate business purpose prompted the incorporation of Vision because, as members of a limited liability company, the members of JCLC did not have a need to protect themselves from unlimited liability as was the case for the partners in Bramblett. Conversely, petitioner contends that he, his brother, and Oldach possessed a legitimate business reason to organize Vision. Although the members of JCLC were not exposed to unlimited liability as were the partners in Bramblett, by incorporating Vision to perform development work on a relatively small parcel of land, they protected JCLC’s sole asset, the remaining land, from obligations arising from Vision’s development activity. For those reasons and because Vision was organized for a legitimate business purpose and all corporate formalities were followed, we conclude that Vision’s development activity is not attributable to JCLC. III. The Continuity and Frequency of Sales as Distinguished From Isolated Transactions In determining whether property was held for sale in the ordinary course of business, the frequency and substantiality of sales is the most important factor to be considered. See Suburban Realty Co. v. United States, 615 F.2d 171, 176 (5th Cir. 1980); Medlin v. Commissioner, T.C. Memo. 2003-224; Hancock v. Commissioner, T.C. Memo. 1999-336. Frequent and substantial sales of real property more likely indicate sales in the ordinary course of business, whereas infrequent sales for significantPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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