O'LEARY v. Department of Revenue

In 1973 Ray O'Leary, Michael Angiuli, and Eugenia Lewis formed a general partnership, M & R Investments to "engage in and carry on a building management business and other ventures of mutual agreement." Initially, M & R purchased several small apartment complexes. It then bought and sold a number of complexes so that it could obtain more apartment units in fewer buildings.

The Department of Revenue audited M & R for the period beginning January 1, 1976 through June 30, 1980. During the audit period, M & R sold 17 of the 23 apartment complexes it owned. All of these 17 complexes were sold…