A recent Tax Court decision has provided a good set of guidelines when considering whether a sale of real estate is an investment activity or a trade or business. In Pool v. Commissioner, TC Memo 2014-3, the court held in favor of the IRS, deciding that the income was trade or business ordinary income, not capital gain. Although the facts and lack of proof in this case strongly favored the IRS, the case provides insight on what to avoid when structuring a real estate transaction.