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investment activity and the expenses thereof as deductible under
section 212 only from adjusted gross income and subject to the 2-
percent floor on miscellaneous itemized deductions under section
67.
Petitioners’ proposed revised Federal income tax returns
continue to treat petitioners as engaged in a number of separate
trades or businesses, specifically a timber farm business, a
consulting business, and computer and real estate rental
businesses.
On petitioners' original Federal income tax returns for the
years in issue, petitioners claimed $897,685 in total net losses
relating to the timber farm. On petitioners’ Federal income tax
returns for the years 1985 through 1992, petitioners claimed
$2,114,325 in total net losses relating to the timber farm.
By the end of 1993, on petitioners’ proposed revised Federal
income tax returns for 1985 through 1993, petitioners claimed
$3,051,225 in total net losses relating to the timber farm.
On the line on each of their original Federal income tax
returns for each year in issue, to indicate whether they
maintained a home office, petitioners indicated "No". However,
on the Schedules C of their original Federal income tax returns
for 1987, 1988, and 1989, relating to their various alleged
business activities (namely, the timber farm, the Tahiti
Property, the consulting business, and the computer and real
estate rental businesses), petitioners claimed expenses relating
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