Posted by John Merchant on July 21, 2003 at 21:34:15:
I’m working on that issue right now, and as you point out, the real issue appeare to be how long, how many, etc.
I’ve asked a couple of the national custodians to give me their take on this, as they advertise for RE investors’ IRAs, and give examples of their clients who’ve done short term holds, with sales for substantial profits, without UBIT problems.
It may be a day or so but I will provide the board with the info I glean; and if unable to get substantive info that way, I guess I’ll have to go to the law library and do some serious reading so as to be able to give a fairly dependable answer.
If anybody else has already done this legal research, we’d welcome hearing from you as to what exactly you’ve found in the law…no guesses please, but some hard legal citations as per IRC, or court decisions thereon, or IR Regs.
While I’m sure not any kind of tax expert (which John Hyre surely is), it is my understanding that the issue of when/if one becomes a dealer is the number of deals one does in a year…one or two, probably not held to be a dealer; more than that, some risk.