If all requirements of Code Section 1237 are met If al a. all income from the sale of lots by the taxpayer will be considered capital gain income b. all income from the sale of lots by the taxpayer will be considered ordinary income c. some income may be capital and some may be ordinary if 5 lots are sold to buyer I and then 3 lots to buyer two d. if there is capital and ordinary income, the ordinary income will be limited to 5% of the revenue (less 5% of selling expenses)