Kenneth E. Perry and Mary A. Hofer - Page 19

                                       - 19 -                                         

                  Under its terms, the above rule applies only where                  
             "land is purchased or held primarily with the intent to                  
             profit from increase in its value".  See Engdahl v.                      
             Commissioner, 72 T.C. 659, 668 n.4 (1979); Eldridge v.                   
             Commissioner, T.C. Memo. 1995-384; Hoyle v. Commissioner,                
             T.C. Memo. 1994-592; Harston v. Commissioner, T.C. Memo.                 
             1990-538, affd. without published opinion 936 F.2d 570 (5th              
             Cir. 1991); Fields v. Commissioner, T.C. Memo. 1981-550;                 
             sec. 1.183-1(d)(1), Income Tax Regs.  "If the taxpayer's                 
             primary intent is not to profit from appreciation of the                 
             land, then the general rule of the regulation applies in                 
             determining whether there is a single activity."  Hoyle v.               
             Commissioner, supra.  Under the general rule, all facts and              
             circumstances are taken into account in determining whether              
             several undertakings constitute one activity for purposes                
             of section 183.                                                          
                  In this case, we find that petitioners' primary intent              
             was not to profit from the increase in the value of the                  
             land used to conduct their horse breeding and boarding.                  
             Rather, petitioners' primary intent was to breed and board               
             horses.  Cf. Fields v. Commissioner, supra.  In determining              
             whether petitioners' horse breeding and boarding and their               
             holding of the land constitute a single activity, we apply               
             the general rule contained in section 1.183-1(d)(1), Income              





Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011