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(3) Time and Effort Expended by the Taxpayer
Section 1.183-2(b)(3), Income Tax Regs., provides in
pertinent part as follows:
The fact that the taxpayer devotes much of his
personal time and effort to carrying on an
activity, particularly if the activity does
not have substantial personal or recreational
aspects, may indicate an intention to derive a
profit. A taxpayer's withdrawal from another
occupation to devote most of his energies to the
activity may also be evidence that the activity
is engaged in for profit. The fact that the
taxpayer devotes a limited amount of time to an
activity does not necessarily indicate a lack
of profit motive where the taxpayer employs
competent and qualified persons to carry on
such activity.
Petitioner held a full-time job as district sales
manager for State Farm throughout the years in issue.
Given petitioner's high salary, it is reasonable to
conclude that this required a large expenditure of
petitioner's time and energy. We note that petitioner
testified that he spent a great deal of time in the
evenings and on weekends working on his "farming" activity.
He testified that he constructed gates and fences on the
property, cleared the fields of rocks and other debris,
constructed a pole barn for storing farm equipment, and
helped in constructing a driveway, planting Christmas
trees, and improving the ponds. However, we note that the
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