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depreciation and $244,178 counting depreciation. During the
years in issue (1988 to 1990), petitioner lost $79,955 not
counting depreciation and $97,404 counting depreciation.
Craig Gee (Gee), the revenue agent who audited petitioner's
returns, testified that petitioner said during the audit that she
had a profit in only 1 of the 37 years she ran the farm. That
profit was for a year in the 1970's. Gee's testimony was based
on his contemporaneous written notes. Petitioner said that she
did not recall making this statement. We see no reason to doubt
Gee's testimony in light of the fact that he based it on
contemporaneous notes and petitioner has no contrary
recollection.
This factor strongly favors respondent.
6. Amount of Occasional Profits, If Any
Small occasional profits with large continuous losses may
indicate that a taxpayer does not have a profit objective. Sec.
1.183-2(b)(7), Income Tax Regs. Petitioner had no profits in any
year from 1985 to 1993, and she apparently had a profit in only 1
of the 37 years she ran the farm.
Petitioner correctly contends that a profit objective may be
present even if there is no profit, and that she must have only
an actual and honest profit objective, not a reasonable
expectation of profit. Petitioner cites Siegal v. Commissioner,
T.C. Memo. 1992-334. In Siegal, the taxpayers bought a
deteriorated citrus grove and an overgrown pasture. The
taxpayers put the property into good condition. Although the
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