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business records were kept; there were losses over many years;
the Dickersons only reported receipts in one year of operation;
and the trees provided personal pleasure because they were
located at the Dickerson's residence. Petitioners offer no legal
argument but to say that they were engaged in the tree farming
activity for profit; they offer no evidence but their own
uncorroborated testimony. Petitioners have failed to meet their
burden of proof. Petitioners are, however, entitled to deduct
their expenses to the extent that they received gross income from
the activity. Sec. 183(b)(2). To the extent that respondent has
disallowed expenses in excess of gross receipts for the tree
farming activity for the 1989 and 1990 tax years, we sustain
respondent.
Failure To Report Pension Fund Withdrawal in 1987
The Michoff, Srs., made a taxable withdrawal from their
pension plan in the 1987 tax year in the amount of $9,047. The
Michoff, Srs., failed to report their pension income. This
withdrawal was an early distribution from their pension plan.
The parties stipulated to the above facts, and the Michoff, Srs.,
made no argument in their opening brief concerning the issue. In
their reply brief, the Michoff, Srs., object to the stipulated
facts and contend that this withdrawal was a total distribution
as a result of the disability of Mr. Michoff, Sr., and therefore
the 10-percent penalty should not apply. See sec.
72(t)(2)(A)(iii). Gross income includes any amount received from
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