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land on which this work was done is contiguous to the land
on which petitioners maintain their personal residence.
We believe that some of this work contributed directly or
indirectly to the enjoyment of petitioners' residence.
Furthermore, while petitioner hired Mr. Robinson, an
experienced farmer, to cultivate row crops on a portion of
his land, petitioner did not cultivate row crops on the
property during all of the years in issue.
(4) Expectation That Assets Used in the Activity
May Appreciate in Value
Section 1.183-2(b)(4), Income Tax Regs., provides as
follows:
The term "profit" encompasses appreciation in
the value of assets, such as land, used in the
activity. Thus, the taxpayer may intend to
derive a profit from the operation of the
activity, and may also intend that, even if no
profit from current operations is derived, an
overall profit will result when appreciation
in the value of land used in the activity
is realized since income from the activity
together with the appreciation of the land
will exceed the expenses of operation. * * *
According to the depreciation schedules attached to
petitioners' returns, it appears that petitioners paid
$95,000 for their land and more than $68,000 for the
improvements and equipment used in connection with their
farm activity. Petitioners make a general argument that
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