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Commissioner, 960 F.2d 526 (5th Cir. 1992); Suburban Realty Co.
v. United States, 615 F.2d 171 (5th Cir. 1980); Biedenharn Realty
Co. v. United States, 526 F.2d 409 (5th Cir. 1976). We apply
these factors to determine whether the dealership held the
classic cars for investment or for sale.
1. Frequency and Regularity of Sales
The frequency and regularity of sales are among the most
important factors in determining whether an asset is held for
investment or as inventory. Suburban Realty Co. v. United
States, supra at 176 (cited by Williford v. Commissioner, supra);
see also Biedenharn Realty Co. v. United States, supra at 416;
Buono v. Commissioner, 74 T.C. 187, 199 (1980); Goldberg v.
Commissioner, 223 F.2d 709 (5th Cir. 1955) (frequency of sales
alone is not sufficient to establish a taxpayer is engaged in
selling assets as a business). The inference, generally, is that
frequent sales serve as an indicium that the assets are being
held for sale, while infrequent sales serve as an indicium that
the assets are being held for investment.
Whether the number of sales was sufficiently frequent must
be viewed in the context of the particular industry at issue.
14(...continued)
inventory. See Williford v. Commissioner, supra (citing Bittker
& Lokken, Federal Taxation of Income, Estates and Gifts, par.
51.2.3, at 51-18, par. 51.2.4, at 51-23 (2d ed. 1990); Ross v.
Commissioner, 227 F.2d 265, 268 (5th Cir. 1955); and Goldberg v.
Commissioner, 223 F.2d 709, 713 (5th Cir. 1955), revg. 22 T.C.
533 (1954)).
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