- 15 - method in an attempt to improve profitability. Thus, we do not conclude that these changes indicate a profit motive. It is clear from the record that petitioners failed to maintain complete and accurate books and records for the apple orchard activity, did not conduct the activity in a manner substantially similar to other comparable, profitable businesses, and did not make changes in order to improve profitability. Accordingly, we find this factor weighs against petitioners. Second, preparation for the start of an activity through extensive study of its accepted business, economic, and scientific practices, or consultation with those who are experts therein indicates that the taxpayer has entered into the activity for profit. Sec. 1.183-2(b)(2), Income Tax Regs. Petitioner testified that although he had never raised any type of commercial farm product before he and Mrs. Zdun purchased the Tiller property, he had, however, "dabbled" in organic gardening with his father and another man on 1 or 2 acres in Santa Maria, California. Petitioner testified that he had attended shows and exhibits on organic gardening, as well as a course on how to prune fruit trees. In addition, petitioner consulted with his neighbor, who has 2,000 trees, about how to grow trees in his area. Finally, petitioner received advice about planting his trees from the company in Michigan from which he ordered the trees.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011