Oakcross Vineyards, LTD., Dennis D. Groth, Tax Matters Partner - Page 2

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          partnership’s self-employment income by the same amount.  Unless            
          otherwise noted, all section references are to the Internal                 
          Revenue Code (Code) in effect for the year in issue, and all Rule           
          references are to the Tax Court Rules of Practice and Procedure.            
               The issue to be decided is whether respondent's                        
          determination that Vineyards must report its income from the sale           
          of grapes and other property on the accrual method, rather than             
          the cash receipts and disbursements method, in order to clearly             
          reflect its income was an abuse of respondent’s discretion.                 
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated for trial pursuant to           
          Rule 91.  The parties’ stipulations of fact are incorporated                
          herein by reference and are found as facts in the instant case.             
               At the time the petition in the instant case was filed,                
          Vineyards maintained its principal place of business in Oakville,           
          General Background                                                          
               Vineyards was organized on May 26, 1981, as a California               
          limited partnership to acquire and operate a vineyard in                    
          California's Napa Valley.  Mr. Groth and his wife Judith                    
          (sometimes referred to herein together as the Groths) are the               
          general partners of Vineyards and own an 85-percent interest in             
          the partnership.  Trusts for the benefit of each of the Groths'             

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