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Overall, we do not find the segregation of the dealership’s
classic cars relevant to our determination whether they were for
investment or for sale. We therefore find this factor neutral.
5. Purpose of Acquisition
This factor relates to whether the taxpayer intended to hold
the property for sale or to hold the property for investment.
Williford v. Commissioner, supra. Respondent argues that the
dealership’s application for “exhibition” license plates
indicates that the dealership did not hold the classic cars for
sale. Instead, respondent argues that the exhibition plates
essentially meant the classic cars were not for sale. As
petitioner countered, the exhibition plates did not restrict the
cars from being sold but merely were a means of informing the
public that the classic cars were at least 25 years old.
Respondent also argues that the dealership acquired the
classic cars to hold them for investment because Mr. Taylor was
“passionate” about cars in general and classic cars in
particular. Testimony established that every classic car the
dealership owned was acquired so it could be sold for a profit.
We do not find it relevant whether Mr. Taylor was passionate
about classic cars.
The dealership’s accounting treatment of the classic cars
was no different from the new or used cars. Each car, whether
new, used, or classic, was assigned a stock inventory number.
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