- 5 -
Over the years, petitioner entered the cattle in various
cattle shows, and the cattle won several awards. Petitioner was
proud of the awards and derived personal satisfaction therefrom.
Petitioner used petitioners’ personal checking account to
pay for ranch expenses. Petitioner did not maintain a written
business plan, a general ledger, or a written budget with respect
to the ranch.
In order to be profitable, petitioner needed to maintain at
least 140 head of cattle on the ranch. In light of the
topography of the ranch, however, the ranch could only support
100 head of cattle.
In 1995, petitioner sold most of the cattle, and thereafter
petitioner raised only a few head of cattle. Also in 1995, for
the first time, petitioners' ranch income was greater than
expenses, resulting in a profit of $10,454.
On their 1983 through 1996 joint Federal income tax returns,
petitioners reported gross income, expenses, and net income or
loss relating to the ranch and income from petitioner’s medical
practice and other activities as follows:
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011