Gary G. and Linda J. Hart - Page 19

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          are "The commercial production of plants (including plant                    
          products such as flowers, vegetables, or fruit) in a greenhouse"             
          or "the commercial production of mushrooms."  Sec. 1.48-10(c)(2),            
          Income Tax Regs. (Emphasis added).  It is clear that the Tobacco             
          Barn was not specifically designed and constructed for either of             
          these permissible purposes.  The Tobacco Barn is not a greenhouse            
          in which plants or plant products such as flowers, vegetables or             
          fruits are commercially produced.  See sec. 1.48-10(c)(2)(i),                
          Income Tax Regs.  Neither is it a structure used in the                      
          commercial production of mushrooms.  See sec. 1.48-10(c)(2)(ii),             
          Income Tax Regs.  The Tobacco Barn therefore does not meet the               
          specific design test.6                                                       
               Second, a "horticultural structure" must be exclusively used            
          for (i.e., the "exclusive use test") the above-enumerated                    
          purposes.  See sec. 1.48-10(c)(1)(ii), Income Tax Regs.  Under               

          6  Although not dispositive, we find petitioners'                            
          characterization of the Tobacco Barn as a "barn" to be probative             
          in evaluating the function of the structure.  Legislative history            
          and case law indicate that "general purpose agricultural                     
          structures such as barns and other farm structures which can be              
          adapted to a variety of uses" do not constitute single purpose               
          horticultural structures.  S. Rept. 95-1263 at 117 (1978), 1978-3            
          C.B. (Vol. 1) 315, 415; see Sherwood v. Commissioner, T.C. Memo.             
          1988-544.  Petitioners stored farm equipment in the Tobacco Barn.            
          Although not clear at what financial cost, the Tobacco Barn could            
          also be made foundationally stronger and could thereafter house              
          cattle.  Thus, even though we do not base our holding on this                
          issue, these facts suggest that the Tobacco Barn could be adapted            
          to a variety of uses and therefore is a "general purpose"                    

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