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The dealership intended to recoup its costs of restoring the
classic cars by selling them at a profit. In 1990, the
dealership sold a Packard convertible for $330,000, earning a
profit of $143,340. The dealership made three more sales that
year, and three in the succeeding year.8 The dealership
thereafter strategically began acquiring more classic cars and
increasing its participation in promotional events to generate
interest, win competitions, and service the wealthy clientele the
dealership hoped would follow. This plan was abruptly derailed
in 1997 when Mr. Taylor died, within a month of being diagnosed
with lung cancer.
Mr. Taylor’s shares in the dealership represented most of
the value of his estate. To raise money for the estate tax, Mr.
Taylor’s estate requested a liquidation of the DTE shares.
Petitioner agreed to a section 303 stock redemption and resolved
to sell the classic cars to raise the necessary capital. The
dealership hired a broker and sold approximately 69 classic cars
during 1999 and 2000, the years at issue.
7(...continued)
property as a museum allowed the dealership to recoup some of the
overhead costs for maintaining and storing the cars, while still
holding them for sale. The museum was open to the public from
1989 through 1999.
8The dealership sold a total of 11 vehicles and made 6
trades prior to the years at issue.
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