David Taylor Enterprises, Inc. & Subsidiaries - Page 19

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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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Last modified: May 25, 2011