James M. Goforth and Brenda Goforth - Page 2




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               Unless otherwise indicated, 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.                                                                   
               The issue for decision is whether petitioners' cattle ranch             
          activity constituted an activity entered into for profit under               
          section 183.  All references to petitioner in the singular are to            
          James M. Goforth.                                                            

                                   FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.                
               At the time the petition was filed, petitioners resided in              
          Amarillo, Texas.                                                             
               From the time he was a child, petitioner grew up on a ranch             
          and helped raise cattle.                                                     
               In 1974, after completing medical school, a residency in                
          pathology, and 2 years as a military doctor, petitioner began to             
          practice medicine in Amarillo, Texas.                                        
              Also in 1974, petitioners purchased 640 acres of ranch land,            
          located approximately 43 miles from petitioners' residence in                
          Amarillo and from petitioner’s medical office.  On this land                 
          petitioner began to raise Angus-Hereford cattle.  From 1974                  
          through 1982, petitioners purchased additional land adjacent to              







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