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petitioners' actually incurred losses from their timber farm far
in excess of appreciation that occurred in the value of the
timber. We disagree. Respondent's calculations are flawed and
ignore the credible evidence as to the value of the timber and
other improvements to and assets located on the timber farm.
(8) Financial status of taxpayers: Petitioners are wealthy
and, during the years in issue, could well afford to wait to
realize expected profits from their timber farm until the prices
for cut timber and the market make it appropriate to maximize
those profits.
(9) Personal pleasure or recreation: None.
In summary, the evidence indicates that petitioners in 1985
purchased an existing, mature timber farm, that petitioners
immediately and in each year undertook substantial activity, and
incurred substantial expenses, to protect and enhance their
timber farm business, that petitioners' activity in connection
with the timber farm constituted an existing for-profit trade or
business, and that petitioners' use of the timber farm did not
constitute a hobby, personal recreation, nor a personal,
nonbusiness activity.
At the time of purchase in 1985 and during each of the
years in issue (namely, 1987 through 1989), petitioners intended
to, and did, hold and manage the timber farm as a for-profit
business activity. Petitioners' ownership and operation of the
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