Terry F. and Carol J. Zdun - Page 2

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               1993           9,683          1,937                                    
               1994           10,019         2,004                                    
               All section references are to the Internal Revenue Code in             
          effect for the years in issue, and all Rule references are to the           
          Tax Court Rules of Practice and Procedure, unless otherwise                 
          indicated.  All dollar amounts are rounded to the nearest dollar,           
          unless otherwise indicated.                                                 
               After concessions by the parties,1 the issues for decision             
          are:  (1)  Whether petitioners' apple orchard activity and                  
          dentistry activity should be treated as one activity or two                 
          separate activities for purposes of section 183, and whether                
          petitioners' apple orchard activity was engaged in with the                 
          intent to make a profit within the meaning of section 183 during            
          the years at issue.  We hold petitioners' apple orchard activity            
          and dentistry activity are two separate activities within the               
          meaning of section 183.  We further hold petitioners' apple                 
          orchard activity was not engaged in with a profit objective under           
          section 183. (2)  Whether petitioners are liable for an accuracy-           
          related penalty pursuant to section 6662(a) for 1992, 1993, and             



               1  Respondent determined that petitioner was an employee of            
          a denturist from whom he rented an equipped office, rather than a           
          self-employed dentist.  In the notice of deficiency, respondent             
          disallowed petitioners' self-employment tax deductions of $1,027,           
          $993, and $747 for 1992, 1993, and 1994, respectively.  After               
          trial, respondent conceded that petitioner was self-employed                
          during the years at issue.                                                  




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