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C. Conclusion
The ultimate inquiry in this case is whether the classic
cars were held primarily for sale. We find that they were. We
find compelling the dealership’s continuous and consistent
treatment of the classic cars as held for sale. We also find
testimony concerning the dealership’s sales efforts credible and
persuasive. From the date the dealership first acquired a
classic car, the dealership has been in the business of selling
cars. The dealership’s classic cars were consistently treated
for book purposes and tax purposes as held for sale. We surmise
respondent now objects because of the ordinary losses generated
by the sales in the years at issue. Respondent was apparently
content to collect tax at ordinary income rates on gains from
sales of the dealership’s classic cars in prior years.
We have found that all of the pertinent factors favor
petitioner or were neutral. The factors, however, are not
dispositive, and each case must rest upon its own facts. The
focus here is upon the statute, which excludes from capital asset
treatment property held by the taxpayer primarily for sale to
customers in the ordinary course of his or her trade or business.
Sec. 1221(a)(1); see Thompson v. Commissioner, 322 F.2d 122, 127
(1963) (cited by United States v. Winthrop, 417 F.2d 905, 910
(5th Cir. 1969)), affg. in part and revg. in part 38 T.C. 153
(1962); Wood v. Commissioner, T.C. Memo. 2004-200.
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