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eventually to realize substantial overall net profits therefrom
at the time the trees are cut and sold. Petitioners'
bookkeeping was amateurish but extensive.
(2) Expertise: Petitioners were innovative, attentive,
informed, hardworking, capable, and no-nonsense owners and
managers of the timber farm. They hired experienced employees,
and, where necessary, they hired experts to advise them on
aspects of the timber farm.
(3) Time and effort: Petitioner worked extremely long
hours and put a great deal of effort in maintaining and
improving the timber farm, and he expected the same of his
employees.
(4) Appreciation in value of assets: Petitioners' good-
faith intent and expectation that the timber on the timber farm
would appreciate in value are clear and have been proven
accurate.
(5) Success in other activities: Petitioner's success as a
businessman in a number of activities is unquestioned.
(6) and (7) Income or losses realized: Profits and
appreciation that appear to be available from petitioners'
timber farm have not yet been realized or cashed in. But they
are there, ready to "harvest", in amounts significantly in
excess of petitioners' costs.
Respondent argues that under a proper calculation of the
costs that petitioners incurred on their timber farm,
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