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Petitioners made and paid for modest improvements to the
mobile unit. From 1985 through 1989, petitioners' total cost for
purchase of and improvements to the mobile unit was $147,643.
Petitioners have never stayed on or used the timber farm for
personal purposes. Similarly, petitioners have never stayed
overnight in the mobile unit for personal purposes. Petitioners
remained in the mobile unit overnight only when they were at the
timber farm to work on the various repair and improvement
projects.
After purchasing the timber farm in 1985, petitioner
continued to investigate, study, and consult with experts in the
timber industry as to how to manage the timber farm. Petitioner
spoke frequently with representatives of Georgia Pacific and
observed how Georgia Pacific managed and harvested timber from
its timber farm property adjacent to petitioners' timber farm.
Petitioner often checked the market price for cut timber and
evaluated whether any of the timber on the timber farm should be
cut and sold.
In 1985 and 1986, soon after petitioners purchased the
timber farm, timber prices fell dramatically in the United States
and, until at least 1989, remained below the estimated costs
petitioner would incur to harvest the timber. Accordingly, on
advice of others in which he concurred, petitioner postponed the
cutting, harvesting, and sale of any of the standing timber on
the timber farm.
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