Is the owner of a Sub S Corp (S) a Real Estate Dealer?
1. S incorporated in 1980 with a variety of assets
(real estate, securities, royalties)
2. In 1990 S develops one parcel into 3 home lots, sells one lot and builds and sells 2 homes
3. Subsequent to #2 S buys and builds 5 homes (approx years 1995-2000)
4. S also invests in 9 apartment buildings during the 1995-2000 time
5. 2000-2013 - S has no real estate activity other than collecting rents
6. In 2013 S acquires real estate for development and transfers property
into an LLC
with a third party
7. 2016 (est) the LLC completes development of 6 unit condominium and sell 6 each unit
8. As a limited partner S will report its share of profits as ordinary income
Question - at any time during this period, could S have been considered a real estate dealer or will it be considered a dealer even though the condo sales
are in a LLC?