Recently the United States Tax Court ruled that a taxpayer selling unimproved lots on a regular basis cost him capital gains treatment ( Flood, TC Memo. 2012-243 ). A day trader (who also ran a real estate business) purchased 250 lots over the course of 8 years at bargain prices with the intention of reselling them at a profit. No lots were subdivided and no improvements were made to the properties. He sold 42 lots over a 2-year period and reported the profits as capital gains. But the court decided that with so many sales, he was a dealer in realty, so his profit is ordinary income and also subject to self-employment tax.