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officer at Washington State Bank, his cousin, and other farmers.
Although petitioner does not maintain a separate checking account
for his ranching activities, he maintains monthly and yearly
ledger sheets which indicate items of ranch expense and amounts
paid.
When asked at trial about the future profitability of his
activities, petitioner offered confused and often contradictory
testimony. Nevertheless, we understand petitioner to have argued
that once he has paid off the debt on the farm equipment he has
purchased, he will be able to turn a profit from the sale of
calves born to his herd, the size of which he hopes will grow to
about 100 head.
Respondent states that petitioner's ranching activities lack
a profit motive, and that he is not entitled to the Schedule F
deductions claimed for the years at issue. Petitioner, of
course, disagrees and argues that he is entitled to the
deductions claimed as he engaged in the activities at the ranch
for the primary purpose of turning a profit.
Discussion
In general, section 183(a) provides that if an activity is
not engaged in for profit, no deduction attributable to such
activity shall be allowed except as provided in section 183(b).
For purposes of section 183, the term "activity not engaged in
for profit" means any activity other than one with respect to
which deductions are allowable for the taxable year under section
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