What makes a property sale a “dealer” sale for tax purposes?
Abstract: When the IRS classifies a sale of real property as a “dealer” sale — meaning the property was held for sale to customers in the ordinary course of a trade or business — the tax ramifications can be quite dramatic. This article explains how a California couple who conducted real estate business through several entities were challenged by the IRS. The property was originally acquired for development but the taxpayer contended that it held the property primarily to allow the market to recover from the recession. The article explains why the IRS viewed it as an investment.