- 38 -
factor may be more significant than the superficial presence of
other factors. Id.
Citing Richmond Television Corp. v. United States, 345 F.2d
901, 907 (4th Cir. 1965), vacated on other grounds 382 U.S. 68
(1965), respondent argues that even if, in later years, the
timber farm constituted a trade or business or for-profit
activity, because of petitioners' failure to cut and sell any of
the timber during the years in issue, petitioners' activity with
regard to the timber farm should be regarded only as startup
activity, not activity of an existing trade or business or for-
profit activity. Respondent's argument seems to be based on the
assertion that to be treated as a current for-profit activity,
the timber farm must have generated current income during the
years before us.
We disagree with respondent’s arguments as to the timber
farm. In each year, the trees on petitioners' timber farm were
increasing in size, width, volume, and, generally, in value
depending on market prices for cut timber.
As the U.S. Dept. of Agriculture’s Forest Owners’ Guide To
Timber Investments, The Federal Income Tax, and Tax
Recordkeeping, No. 681 (1989), explains with regard to timber
growing activity, a timber farm activity may be regarded as a
current for-profit activity --
even if the property is currently producing no income --
provided that the timber growing activity is being engaged
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