Concinnity LLC purchased 300 undeveloped acres and then entered into an agreement with the local county where it assumed responsibility for the costs and expenses to improve the land. The property later became the Elk Grove Planned Unit Development. Concinnity reported income from the sale of land within the development on its 2003?2005 tax returns as long-term capital gains. The Tax Court's Judge Goeke applied the five-factor test for determining whether a taxpayer held property primarily for sale to customers in the ordinary course of business to reach agreement with the IRS that Concinnity's partners incorrectly reported the partnership income as long term capital gains when it should have been reported as ordinary income. Cordell Pool, TC Memo 2014-3 (Tax Ct.).
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