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(6) History of Income or Loss With Respect to the Activity
Section 1.183-2(b)(6), Income Tax Regs., provides in
pertinent part as follows:
A series of losses during the initial or start-up
stage of an activity may not necessarily be an
indication that the activity is not engaged in
for profit. However, where losses continue to be
sustained beyond the period which customarily is
necessary to bring the operation to profitable
status such continued losses, if not explainable,
as due to customary business risks or reverses,
may be indicative that the activity is not being
engaged in for profit. If losses are sustained
because of unforeseen or fortuitous circumstances
which are beyond the control of the taxpayer,
such as drought, disease, fire, theft, weather
damages, other involuntary conversions, or
depressed market conditions, such losses would
not be an indication that the activity, is not
engaged in for profit. * * *
Petitioners reported significant losses during each
of the years in issue. Petitioners make the general
contention that these losses were caused by "unanticipated
start-up expenses, drought, deer damage, and other unusual
and unexpected circumstances." However, petitioners make
no attempt to quantify the losses that they claim are
attributable to each of these causes. For example,
petitioners do not enumerate specifically what startup
expenses were unanticipated. Similarly, the record does
not state whether the drought to which petitioners make
reference took place during the years in which they planted
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