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the ranch indicate that the ranch activity was not carried on
in a businesslike manner. Petitioner derived personal
satisfaction from raising what he believed were superior cattle
and from awards the cattle won. Petitioners used the ranch for
a weekend retreat, and petitioners intended to retire on the
ranch. In order to be profitable, petitioners needed to
maintain at least 140 head of cattle on the ranch. The ranch
however, supported only a maximum of 100 head of cattle,
precluding any profit from the ranch (except for 1995 when
petitioner liquidated his herd of cattle for a small profit).
From 1983 to 1996, petitioners’ ranch activity accumulated
losses of more than $1.7 million.
Based on the evidence, we conclude that petitioners have
failed to establish that an actual and honest profit objective
was associated with petitioners’ ranch activity.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011