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ledgers, invoices, or canceled checks. Petitioners did not prove
that the Double D Ranch, Inc., incurred any expenses which could
be classified as ordinary and necessary.
A taxpayer claiming a deduction under section 162 or 212 for
an expense, or under section 165 for a loss, must have an "actual
and honest profit objective" in order to avoid the disallowance
of such deductions. See sec. 183; Dreicer v. Commissioner, 78
T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205 (D.C.
Cir. 1983). Mr. Streck testified that petitioners initially
purchased a ranch located in Kentucky as "a getaway because I was
working in New York and traveling all the time and we wanted to
get out in the country." The ranch was later incorporated under
the name Double D Ranch, Inc. Although petitioners apparently
engaged in some farming, Mr. Streck testified that the farming
activity was a "total disaster". Throughout the time petitioners
owned Double D Ranch, Inc., they continued to use the log cabin
constructed on corporate property as a personal residence and use
the boat dock located on corporate property for pleasure.
Petitioners failed to provide evidence of an actual and honest
objective to make a profit. We sustain respondent's disallowance
of deductions that petitioners claimed with respect to Double D
Ranch, Inc.
The next issue is whether Mrs. Streck qualifies as an
innocent spouse pursuant to section 6013(e). Generally, a
husband and wife are jointly and severally liable for the total
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