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including boarding polo ponies, which brought in substantial
revenues, and developing the wildlife habitat in an effort to
generate revenue from hunting, fishing, and recreational use.
Thus, viewing the record as a whole, we hold that the
Johnstons engaged in their farm activity with a bona fide intent
to make a profit. Accordingly, the losses incurred in such
activity during the years in issue are fully deductible.
Issue 2. Whether Petitioners' Ranching Activity Known as Flying H
Ranch Was an Activity Engaged in For Profit
Flying H Ranch
In December 1985 petitioner acquired a 1,381-acre tract of
rangeland, known as the Flying H Ranch, located on the eastern
slope of the Bighorn Mountains near Sheridan, Wyoming, in north-
central Wyoming, close to the Montana border. Subsequent
purchases of 2,367 acres in December 1986, 925 acres in April
1989, and 3,902 acres in October 1989 increased Flying H to 8,575
acres, its size during the years in issue. The ranch property is
rural rangeland, which is located approximately 5 miles from the
Bighorn Equestrian Center, and approximately 250 miles from the
Flying D Ranch, owned by Ted Turner, which is considered to be in
the same general area by those traveling out west to hunt.
Flying H is a multi-use activity.
Petitioner hired MacCarty, a well-respected and qualified
rancher, to manage Flying H, and Dr. Haaland, an agribusiness
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