Geraldine H. Pearson - Page 2

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               After concessions,1 the sole issue for decision is whether             
          petitioner operated her farm with an actual and honest profit               
          objective in 1988, 1989, and 1990.  We hold that she did not.               
               Section references are to the Internal Revenue Code in                 
          effect for the years in issue.  Rule references are to the Tax              
          Court Rules of Practice and Procedure.                                      
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          A.   Petitioner                                                             
               Petitioner lived in Oregon City, Oregon, when she filed her            
          petition.  Petitioner's parents and grandparents were farmers.              
          Petitioner is experienced and knowledgeable about farming.                  
          She learned how to handle farm animals and equipment and how to             
          ride and show horses competitively when she was a teenager.  At             
          age 14, petitioner was designated to manage her family's farm               
          while her father served in World War II.  Petitioner has lived on           
          a farm since 1949.  Petitioner qualified and was nominated for              
          the American Olympic Equestrian Team in 1952.                               
               Petitioner graduated from the University of Oregon in 1953.            
          She taught riding and philosophy in Pennsylvania from 1953 to               
          1955.  Petitioner worked on a Montana cattle ranch during part              

               1 Petitioner conceded that she is not entitled to deduct               
          $5,475 for employee business expenses that she claimed on her               
          1988 return.  Respondent conceded that petitioner is not liable             
          for additions to tax under sec. 6651 for 1989 and 1990 or under             
          sec. 6653(a) for 1988.                                                      

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