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his home, petitioner uses 1/4 acre to store the empty apple bins
used in harvesting the 600-acre apple orchard. During picking
season, the apples are also kept on the property where they are
eventually loaded and hauled away. During pruning season, cars
and trucks use his long driveway to park, and tractors ride up
and down the road, creating dust and causing wear and tear on the
road.
Petitioner's land is contiguous to the farming property
owned by Roy Farms. Prior to 1989, petitioner and his family
lived in farm-owned housing for 15 years. In 1989, petitioner
and his wife purchased a 5-acre parcel of land abutting the
property and built their own home. All the expense incurred in
purchasing and running the home are paid by the petitioners.
Petitioners pay the mortgage and insurance on the property, as
well as real estate taxes. Although there is no signed contract,
Roy Farms agreed to pay petitioner $1,000 each month to
compensate petitioner for the wear and tear on his roads, for use
of various facilities in his home, and for storage of the farming
equipment and materials on his property.
In his 1992 Federal income tax return, petitioners reported
$12,000 on the Schedule E as rental income, and deducted $12,000
in business expenses and depreciation for the farm's use of his
house. In 1993, petitioner reported the $12,000 as rental
income, but then excluded the entire amount as de minimis income
under section 280A(g)(2).
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Last modified: May 25, 2011