                                                           [DO NOT PUBLISH]


                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                                                                   FILED
                           ________________________ U.S. COURT OF APPEALS
                                                             ELEVENTH CIRCUIT
                                                                 June 9, 2005
                            Nos. 04-14923 & 04-14924
                                                              THOMAS K. KAHN
                             Non-Argument Calendar                CLERK
                           ________________________

                       Tax Court Nos. 5259-99 & 15992-99

JOHN WELLER WOOD, JR.,

                                                               Petitioner-Appellant,

                                       versus

COMMISSIONER OF INTERNAL REVENUE,

                                                              Respondent-Appellee.


                           ________________________

                          Appeals from Decisions of the
                             United States Tax Court
                          _________________________

                                   (June 9, 2005)

Before BLACK, HULL and PRYOR, Circuit Judges.

PER CURIAM:

      Petitioner John Weller Wood, Jr. pro se appeals the United States Tax

Court’s dismissal of his petitions challenging the determinations by the
Commissioner of the Internal Revenue Service (“Commissioner”) that he was

liable for income tax deficiencies and penalties for the 1994, 1995, and 1996 tax

years. These deficiencies and penalties were based on the Tax Court’s findings

that Wood was not in the real estate business, that the real estate he sold was not

business related, and therefore, that he was not permitted to take business

deductions relating to the homes in issue.

      On appeal, Wood argues that the Tax Court erred in determining that he was

not a real estate dealer and in finding that the Commissioner did not violate the

automatic stay in his Chapter 11 bankruptcy by assessing a deficiency and taking

post-petition collection actions. After review, we affirm.

                                I. BACKGROUND

A. Real Estate Purchases

      Between 1974 and 1995, Wood, along with his wife, purchased three homes,

consecutively, which served as their personal residences. In 1974, the Woods

purchased a home in Annandale, Virginia. After Wood retired from the military in

1977, the Woods sold the Virginia home and purchased a home in Warren, New

Jersey.

      The New Jersey home served as the Woods’ personal residence until 1990.

In 1988, the Woods purchased a piece of land in Boca Raton, Florida and in 1989,



                                             2
hired a builder to construct a home on the property. In 1990, the Woods moved

into the Florida home and listed the New Jersey residence for sale with a real estate

agent. The agent rented the New Jersey residence from 1992 until 1994, when it

was sold. The Woods remained in the Florida home until the mortgage was

foreclosed in January 1996.

       In addition to the homes that they purchased as personal residences, the

Woods purchased a parcel of land, a home, and two timeshares. In 1976, the

Woods purchased an undeveloped parcel of land in Florida, which remained

undeveloped throughout the relevant tax years.1 In 1986, the Woods purchased a

house in Hilton Head Island, South Carolina, which they later sold in 1989 to help

finance the construction of the home in Boca Raton, Florida. The Woods also

purchased a one-week timeshare unit in Brookdale, Pennsylvania in 1977 and a

one-week timeshare unit in Gulfstream, Florida in 1987. The Woods continued to

own the undeveloped land in Florida and the two timeshares through 1996.

B. Wood’s Business Interests

       Wood graduated from West Point in 1960 and served in the military until

1977. In 1967, Wood, along with several other officers, became a shareholder of

Miracle Strip Parkway Realty, Inc. (“MSPR”), a corporation organized for the


       1
       Wood entered into a contract to sell the undeveloped land, but the buyer failed to
perform under the contract.

                                                3
purpose of buying land to be divided into lots. MSPR was later converted to a

limited partnership, and Wood was a limited partner during the relevant tax years.

Over the years, MSPR purchased and sold undeveloped land to individuals, real

estate companies, and developers.

      After the Woods moved to New Jersey, Wood was employed first by

Lockheed Electronics and then by ITT Avionics. In 1981, he started a consulting

business. He also started J&M Enterprises, a home improvement business. In

addition, from 1972 through 1996, Wood spent approximately one week each year

maintaining and managing an apartment in Shrewsbury, New Jersey, which was

owned by his mother.

      In 1982, Wood filed a certificate with the State of New Jersey in which he

certified that he was conducting a business under the name Logistics Technology

Group (“LTG”). The certification described LTG’s business as defense

electronics, consulting services, real estate dealer activities, and home

improvement services. Wood also opened a bank account in LTG’s name. From

the LTG account, in 1989 and 1990, he generally paid (1) the installments on the

mortgage for the New Jersey home and (2) taxes and fees associated with the

undeveloped Florida land and the two timeshares.

C. The Bankruptcy Proceeding



                                           4
      On April 29, 1994, the Woods filed for bankruptcy under Chapter 11 of the

Bankruptcy Code in the Bankruptcy Court for the Southern District of Florida.

The Commissioner filed with the bankruptcy court a proof of claim, claiming an

unsecured nonpriority claim of $2,200 and an unsecured priority claim of

$20,389.54. On January 18, 1995, the Woods filed a Chapter 11 plan of

reorganization. On February 6, 1995, the bankruptcy court confirmed the plan of

reorganization, indicating that the Woods were discharged “from any debt that

arose before the date of confirmation of the Plan, except any debts exempted from

discharge under § 523 of the Bankruptcy Code. . . .” On May 18, 1995, the

bankruptcy court issued its final decree and closed the case.

D. The Tax Proceeding

      In December 1997, the Commissioner began an examination of the Woods’

1994, 1995, and 1996 tax returns. On December 21, 1998, the Commissioner

issued a notice of deficiency to the Woods for 1994. On July 19, 1999, the

Commissioner issued a notice of deficiency for 1995 and 1996. In the notices of

deficiency, the Commissioner determined that the Woods were not in the real

estate business from 1994 through 1996 and therefore disallowed expenses and

losses that the Woods had claimed on Schedule C (Profit or Loss From Business)

for those years. The disallowed net losses were $121,966 for 1994, $72,546 for



                                          5
1995, and $345,223 for 1996.2

       Wood filed a petition in the Tax Court in which he argued that the

Commissioner’s determinations were foreclosed by the filing of the Chapter 11

petition in 1994 because the Commissioner’s issuance of the notices of deficiency

violated the automatic stay, see 11 U.S.C. § 362(a), and because the claims had

been discharged in the bankruptcy. In addition, Wood argued that he had been in

the business of selling real estate and therefore the real estate expenses that he

claimed on Schedule C were properly deductible.

       At trial, Wood testified that he had obtained a New Jersey real estate license

in 1973.3 He further testified that he had set up MSPR in Florida to buy large

acreage and divide it into lots, that he was a limited partner in MSPR during the tax

years at issue, and as such, that he attended a meeting once each year to vote on

whether to sell or subdivide a property.4 Wood also testified that he had intended

to rent the property in South Carolina rather than live there and that he had formed


       2
        In the notices of deficiency, the Commissioner made several additional determinations,
all of which were either conceded by the taxpayers before trial or sustained by the Tax Court and
not challenged by Wood in his opening brief and are therefore abandoned. See Maiz v. Virani,
253 F.3d 641, 674 (11th Cir. 2001) (arguments not raised in the opening brief may not be
considered).
       3
         An exhibit, however, indicated that Wood’s license was returned to the State of New
Jersey in 1988.
       4
      A copy of the partnership agreement provides that “[n]o partner shall take part in the
management of the business, [or] transact any business for the partnership. . .”

                                                6
a partnership with his brother and mother-in-law, who contributed $105,000 and

$100,000 respectively toward the Boca Raton home. Wood also testified that the

attempted sale of the undeveloped property in Florida in 1994 was initiated by the

potential buyer.

      The Tax Court determined that the notices of deficiency were not foreclosed

by the Chapter 11 filing because a Chapter 11 filing does not operate as a stay of

either an audit to determine tax liability or a notice of tax deficiency, 11 U.S.C. §

362(b)(9)(A) and (B), and in any event, the Tax Court proceeding against Wood

was not brought until long after the stay was lifted, which was May 18, 1995, at the

latest. See 11 U.S.C. § 362(c)(2). The Tax Court determined that it lacked subject

matter jurisdiction to determine whether the Commissioner’s claims were

discharged in the bankruptcy proceeding because the jurisdiction of the Tax Court

in a deficiency proceeding is generally limited to a redetermination of the correct

amount of a deficiency and is unrelated to the collection of the tax. Swanson v.

Commissioner, 65 T.C. 1180, 1184 (1976) (action for redetermination of a

deficiency “has nothing to do with collection of the tax nor any similarity to an

action for collection of a debt”).

      Turning to the merits, the Tax Court found that Wood did not purchase and

hold the homes in Annandale, Virginia, Warren, New Jersey, or Boca Raton,



                                           7
Florida for sale to customers but rather purchased them as personal residences.

Likewise, the court found that Wood did not purchase the timeshares in Brookdale,

Pennsylvania and Gulfstream, Florida and the residence in Hilton Head, South

Carolina for sale to customers because they were personal vacation properties.

Noting that there was no evidence that Wood, over an eighteen-year period (1976 -

1994), ever attempted to sell or develop the undeveloped land in Florida, the Tax

Court determined that Wood purchased the land as a personal investment and not

as property held for sale in the ordinary course of business. Finally, the Tax Court

determined that Wood’s investment in MSPR did not establish that he was a dealer

in real estate because a partnership is an independently recognizable entity apart

from its partners, and moreover, as a limited partner, Wood did not actively

participate in the conduct of the partnership business. The Tax Court, observing

that the frequency of sales in the real estate context is “highly probative” as to

whether properties were held for personal or investment reasons rather than for

sale, Major Realty Corp. & Subs. v. Commissioner, 749 F.2d 1483, 1488 (11th Cir.

1985), noted that the Woods had sold only four properties during a twenty-year

period. Accordingly, the Tax Court found that the Woods were not real estate

dealers, and therefore the losses and expenses incurred could not be deducted as

business expenses.



                                           8
                                   II. DISCUSSION

         “We review de novo the tax court’s conclusions of law and review findings

of fact for clear error.” Davis v. Commissioner, 210 F.3d 1346, 1347 (11th Cir.

2000).

A. Automatic Stay

         The filing of a bankruptcy petition triggers an automatic stay from “the

commencement or continuation of a proceeding before the United States Tax Court

concerning the debtor.” 11 U.S.C. § 362(a)(8). The stay remains in effect until the

earliest of the closing of the case, dismissal of the case, or the grant or denial of a

discharge. 11 U.S.C. § 362(c)(2). A bankruptcy filing does not, however, stay “an

audit by a governmental unit to determine tax liability” or “the issuance to the

debtor by a governmental unit of a notice of tax deficiency.” 11 U.S.C. §

362(b)(9)(A) and (B).

         Wood filed the Chapter 11 bankruptcy petition on April 29, 1994. On

February 6, 1995, the bankruptcy court confirmed the plan of reorganization and

discharged the Woods from any debt that arose before the date of confirmation.

The bankruptcy court issued its final decree and closed the case on May 18, 1995.

The first notice of deficiency was not issued until December 21, 1998, more than

three years after the automatic stay had ended. Moreover, audits and notices of



                                            9
deficiency are expressly exempted from the automatic stay. 11 U.S.C. §

362(b)(9)(A) and (B). The Tax Court did not err in concluding that the notices of

deficiency did not violate the automatic stay.5

B. Business Expenses Deduction

       A taxpayer generally may deduct expenses that are ordinary and necessary in

carrying on a trade or business, 26 U.S.C. § 162(a), but may not deduct personal,

living, or family expenses. 26 U.S.C. § 262(a). To be deductible, an item must:

(1) “be paid or incurred during the taxable year”; (2) “be for carrying on any trade

or business”; (3) “be an expense” (rather than a capital expenditure); (4) “be a

necessary expense”; and (5) “be an ordinary expense.” Commissioner v. Lincoln

Sav. & Loan Ass’n, 403 U.S. 345, 352, 91 S. Ct. 1893, 1898 (1971) (internal

quotation marks and citation omitted). For a taxpayer to be carrying on a trade or

business, the “taxpayer must be involved in the activity with continuity and

regularity and . . . the taxpayer’s primary purpose for engaging in the activity must

be for income or profit. . . .” Commissioner v. Groetzinger, 480 U.S. 23, 35, 107

S.Ct. 980, 987 (1987). “The frequency and substantiality of sales are highly

       5
        Many of Wood’s contentions respecting the automatic stay relate to a separate notice of
deficiency pertaining to the 1992 tax year, which was addressed in a separate proceeding before
the Tax Court that was unappealable under the procedures prescribed by 26 U.S.C. § 7463 and
was, in any event, outside the jurisdiction of the Tax Court in this proceeding. 26 U.S.C. §
6213(a); Commissioner v. Gooch Milling & Elevator Co., 320 U.S. 418, 421-22, 64 S. Ct. 184,
186 (1943). Accordingly, we do not address Wood’s claims relating to the previous Tax Court
proceeding.

                                               10
probative on the issue of holding purpose because the presence of frequent sales

ordinarily belies the contention that property is being held ‘for investment’ rather

than ‘for sale.’” Suburban Realty Co. v. United States, 615 F.2d 171, 178 (5th Cir.

1980).6

       A person who is engaged in the business of selling real estate to customers

may be characterized as a real estate dealer; however, an individual who holds real

estate for investment or speculation and receives rentals therefrom is not a real

estate dealer. 26 C.F.R. § 1.1402(a)-4(a). Whether a property is held for sale to

customers in the ordinary course of a taxpayer’s business is a question of fact, and

must be considered on a case-by-case basis. See Major Realty Corp. and Subs. v.

Commissioner, 749 F.2d 1483, 1487-88 (11th Cir. 1985). “The ‘holding purpose’

inquiry may appropriately be conducted by attempting to trace the taxpayer’s

primary holding purpose over the entire course of his ownership of the property. . .

. Thus, the inquiry should start at the time the property is acquired.” Suburban

Realty, 615 F.2d at 183-84 (internal citations omitted).

       The Tax Court did not clearly err in determining that the Woods’ homes in

Annandale, Virginia, Warren, New Jersey, and Boca Raton, Florida were not held



       6
       Fifth Circuit decisions issued prior to October 1, 1981 are binding precedent in the
Eleventh Circuit. See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en
banc).

                                               11
for sale in the ordinary course of carrying on a real estate business because they

were the Woods’ personal residences for substantial periods of time. Nor did the

Tax Court clearly err in its finding that the timeshares, the residence in Hilton

Head, South Carolina, and the undeveloped parcel in Florida had no business

purpose. Wood produced no evidence that he made strenuous attempts to sell the

Florida parcel or the timeshares. In fact, he held the Florida parcel for eighteen

years, during which time only one expression of interest in a sale was made,

initiated by a potential purchaser in 1994. Clearly, four sales over a twenty-year

period do not constitute “frequent and substantial” sales. See generally id. at 178.

Finally, Wood’s interest in MSPR and the financial assistance that family members

provided to finance the home in Boca Raton, Florida do not establish that he was in

the real estate business. See Brannen v. Commissioner, 722 F.2d 695, 703 (11th

Cir. 1984) (“[T]he business of a partnership is a separate business from that of the

partners. . . .”). Accordingly, the Tax Court did not err in finding that Wood was

not in the real estate business.

                                   III. CONCLUSION

      For all of the above reasons, this Court affirms the Tax Court decision in

favor of the Commissioner.

      AFFIRMED.



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