- 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, andPage: 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