Court Opinion

ID: 4475611
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:36.868957+00
Date Added: 2024-06-11T15:04:27.291657
License: Public Domain

Johnson, J., dissenting: I disagree with the conclusion reached by the majority. The evidence discloses that in 1940, when enough lots had been sold to liquidate petitioner’s indebtedness to the city for paving, he decided to hold the remaining portions of his 160-acre ■tract and thereafter took no steps to promote sales. Such sales as he made thereafter resulted from unsolicited offers from individuals and he did not advertise his property for sale, hire any agents, erect signs, list the property, or take any other steps ordinarily taken by individuals engaged in the business of selling real estate. “Business,” as that term is used in the statute, “notwithstanding disguise in spelling and pronunciation, means busyness; it implies that one is kept more or less busy, that the activity is an occupation.” Snell v. Commissioner, (CA-5, 1938), 97 Fed. (2d) 891; Dunlap v. Oldham Lumber Co., (CA-5, 1950), 178 Fed. (2d) 781; W. T. Thrift, Sr., 15 T. C. 366, 370; Thomas E. Wood, 16 T. C. 213. An individual who has been active in the real estate business over a period of years can change his status if he indicates his intention to do so and refrains from activities ordinarily pursued by those engaged in such a business. Cf. Carl Marks & Co., 12 T. C. 1196, 1202. Petitioner made such a change in 1940. Thereafter he engaged in the lumber business with his son. Accordingly, in my view, the lots here in question were not, in the language of the statute itself, held by petitioner in the taxable years “primarily for sale to customers in the ordinary course of his trade or business,” section 117 (a) (1), I. R. C., and petitioners correctly reported the gains on the sales as long term capital gains. Tietjens and Rice, JJ., agree with this dissent.