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After concessions by the parties, the issues for decision
are: (1) Whether petitioners'3 farming activity known as
Bendabout Farm was an activity engaged in for profit under
section 183 during the taxable years in issue. We hold it was.
(2) Whether petitioners' ranching activity known as Flying H
Ranch was an activity engaged in for profit under section 183
during the taxable years in issue. We hold it was. (3) Whether
petitioners' horse sales activity operated through a partnership
known as Bendabout Polo Sales and Management was an activity
engaged in for profit under section 183 during the taxable years
in issue. We hold it was. (4) Whether Gillian Johnston's horse
training activity known as GJ Stables, conducted at Bendabout
Farm, was an activity engaged in for profit under section 183
during the taxable years in issue. We hold it was. (5) Whether
$1,131,438 was the fair market value of a conservation easement,
encumbering the Flying H Ranch donated by petitioners to the
Nature Conservancy during 1989. We hold it was.4
Some of the facts have been stipulated and are so found.
The stipulated facts and the accompanying exhibits are
incorporated into our findings by this reference.
3 Hereinafter, the term "petitioners" refers to S.K. Johnston,
Jr. and Gillian Johnston, unless discussing BPS, where the term
petitioners refers to S.K. Johnston, Jr. and Gillian Johnston and
S.K. Johnston III and Julie N. Boyle, f.k.a. Julie N. Johnston.
4 Due to our holding for petitioners on all five issues, we
need not address whether petitioners are liable for additions to
tax or accuracy-related penalties.
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