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preliminary and final site plan approvals for the Jackson Creek
property are less significant than the activities performed by
the taxpayer in Thrift.
Further, in Buono v. Commissioner, 74 T.C. 187, 204 (1980),
we noted that “many cases have allowed capital gains treatment
for taxpayers who subdivided their property even though
improvements have been made thereto”. JCLC purchased the Jackson
Creek property as an investment for appreciation in value and
subsequent sale. Prior to JCLC’s purchase of the property, it
had been rezoned by the town of Monument for residential
purposes. The soil test was performed to ensure that the land
was suitable for its intended purpose. Further, in the context
of this case, JCLC’s efforts in obtaining approval of site plans
is not, by itself, indicative of development activity.
V. Conclusion
Based on our analysis of the foregoing factors, we conclude
that JCLC held the Jackson Creek property as an investment, and
therefore was not engaged in the real estate development
business. Accordingly, we hold that petitioner’s distributive
share of income attributable to gain on the sale of property by
JCLC during 1998 is properly characterized as income from a
capital asset. Sec. 1221(1).
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