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In 1986, petitioners began to consider the feasibility
of purchasing additional real estate near their home.
Mr. Edgar Puthuff owned a 300-acre plot which bordered
petitioners' 5- and 40-acre parcels. Mr. Timothy
VandenHeede, a neighboring farmer and personal friend of
petitioner, had previously raised corn on portions of the
300-acre plot. After discussions with Mr. VandenHeede
regarding the purchase and economic feasibility of farming
the land, petitioner and Mr. VandenHeede agreed to order a
survey of the entire 300-acre plot. Petitioner also
discussed the possible purchase of this additional real
estate with Mr. Mike Robinson, a local farmer, and with
representatives of the local Agriculture Stabilization
Control (ASC) office.
Later in 1986, petitioner and Mr. VandenHeede each
purchased a portion of the 300-acre plot. Petitioners
purchased 120 acres (the 120-acre parcel) contiguous to the
5- and 40-acre parcels, and Mr. VandenHeede purchased the
remaining 180 acres. The 120-acre parcel which petitioners
purchased consisted of crop land, timberland, and some wet-
land. At the time of the purchase, petitioners intended
to farm a portion of the 120-acre parcel. According to
the depreciation schedules attached to their returns,
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