Austin L. Mitchell and Rebecca A. Mitchell - Page 5




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          agriculture courses.  However, he attended farm community                   
          meetings, read farming magazines, and discussed farming issues              
          with farmer clients, friends, and other farmers.                            
          C.   Petitioners’ Residence                                                 
               In August 1978, petitioners bought a house at 502 North                
          Hickory in Salem, Missouri.  Petitioner lived in that house until           
          November 1991, and has lived in the house at the Mitchell farm              
          since then.  Mrs. Mitchell and petitioners’ two sons lived at 502           
          North Hickory until August 1995 when they moved to the house on             
          the farm.                                                                   
               In November or December 1995, petitioners agreed to let                
          Toney E. Hill III (Hill), live at 502 North Hickory rent free. In           
          exchange, Hill agreed to make improvements to the house and pay             
          the utilities.                                                              
               Hill did not pay all of the utilities.  As a result, the               
          electric and water services were disconnected from June 12 to               
          August 15, 1996.  Hill moved out in mid-1996.                               
               Petitioners did not receive any rental income from 502 North           
          Hickory in 1995, 1996, or 1997, and they did not advertise 502              
          North Hickory for rent or sale during those years.  They included           
          it in one of their homeowner’s insurance policies until August 6,           
          1997, when they sold 502 North Hickory.                                     










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