- 11 -
operations to show that she had a profit objective. Petitioner
has not shown that she ran her farm in a manner similar to
comparable businesses.
This factor favors respondent.
2. The Expertise of the Taxpayer or the Taxpayer's
Advisers
Efforts to gain experience and a willingness to follow
expert advice can indicate that a taxpayer has a profit
objective. See Engdahl v. Commissioner, supra at 668.
Respondent concedes that petitioner has farming expertise.
This factor favors petitioner.
3. The Taxpayer's Time and Effort
The fact that a taxpayer devotes a substantial amount of
time and effort to conduct an activity may indicate that the
taxpayer has a profit objective. Sec. 1.183-2(b)(3), Income Tax
Regs. However, the fact that a taxpayer devotes little or no
time to an activity does not necessarily mean that the taxpayer
lacks a profit objective if the taxpayer arranges for qualified
persons to carry on the activity. Sec. 1.183-2(b)(3), Income Tax
Regs.; see Hughes v. Commissioner, T.C. Memo. 1989-528; Palmer v.
Commissioner, T.C. Memo. 1981-354.
Petitioner devoted a substantial amount of time to farm
activities while she was in Oregon. Petitioner estimated that
she spent 1,560 hours in 1988, 1,800 hours in 1989, and 3,600
hours in 1990 working on the farm. She estimated that she worked
5 hours per day on days that she worked away from the farm, and
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011