Earl M. Hasbrouck and Donna M. Hasbrouck - Page 8

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               This determination is based on the facts as submitted.                 
               Any unrevealed circumstances could require the                         
               application of a more restrictive rule.                                
               In fulfilling the terms of the CRP contract, petitioners,              
          among other things, planted approximately 2,750 trees, prepared             
          the land and planted the grasses specified by the Soil                      
          Conservation Service, built fences, purchased seeders, tractors,            
          and water tanks, and kept several goats to prevent the spread of            
          noxious weeds.                                                              
               On their Federal income tax returns, petitioners reported              
          “Wages, salaries, tips, etc.” of $38,840, $30,254, and $23,374              
          for taxable years 1990, 1992, and 1994, respectively.                       
          Petitioners also reported gross receipts from petitioner's                  
          Schedule C construction business in the amounts of $10,758 for              
          1990 and $15,337 for 1992.  Consistent with petitioner's disabled           
          status, petitioners did not attach a Schedule C for his                     
          construction business to their 1994 Federal income tax return.              
               On Schedules F attached to their Federal income tax returns            
          for the years in issue, petitioners reported as income the $2,580           
          received pursuant to the CRP contract, as well as cooperative               
          distributions.5  Petitioners deducted the following Schedule F              
          expenses:                                                                   



               5 Petitioners reported cooperative distributions of $118 and           
          $77 for taxable years 1992 and 1994, respectively.                          




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