Geraldine H. Pearson - Page 11

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          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             





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