The taxpayer ran into difficulties in one of its land development projects and sold it before completing its development plans. Although the land was clearly inventory at the time it was obtained, the taxpayer argued that it became a capital asset at the time it was sold.
Jorré J. found that the gain was ordinary income and not a capital gain. Although it is possible for land acquired as inventory to subsequently be converted into a capital asset, the taxpayer's mere decision to sell the land before development was finished fell well short of the "clear and unequivocal positive act," contemplated in Peachey, to effect such conversion.