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respect to the SRMC business, and drought conditions in the area
of the ranch as responsible for his continued losses. We
disagree that these circumstances are sufficient to justify the
lengthy period of losses at issue.
The hurricane and the SRMC misfortunes are only tangentially
related to the ranching enterprise. In addition, the hurricane
damage was resolved within a relatively short period, impacting
only the winter of 1992-93, so cannot explain the many years of
losses. As to SRMC’s reverses, since petitioner’s level of
involvement in ranch affairs prior to the 1993 corporate problems
does not appear to differ significantly from his subsequent
activities, the SRMC hardships are a less than convincing reason
for losses at the ranch.
The alleged drought, too, falls short of offering a
legitimate excuse. Petitioner testified that he learned of the
dry conditions after he bought parcel 1 in 1990, so the lack of
rainfall was hardly unforeseen when parcel 2 was purchased in
1992. Prior to the years at issue, petitioner should have been
aware of the need to plan for such conditions if he truly
intended to make a profit from his property. As of early 1999,
an irrigation system was still not in place on the property.
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