-2-
for an accuracy-related penalty for negligence under section
6662(c) of $5,836 for 1990 and $7,187 for 1991.
During the years in issue, petitioner deducted certain costs
related to establishing public display gardens on her farm.
Respondent determined that the display gardens and the farm were
separate activities, and that petitioner did not operate the
display gardens with a profit objective. See sec. 183. After
concessions, the issues for decision are:
1. Whether, for purposes of section 183, petitioner's
display gardens undertaking1 (known as Broadmoor Gardens) and
farming undertaking are one activity, as petitioner contends, or
two activities, as respondent contends. We hold that they are
one activity. Respondent concedes that petitioner prevails on
the section 183 issue if Broadmoor Gardens and petitioner's farm
are one activity. Thus, we hold that petitioner operated
Broadmoor Gardens for profit in 1990 and 1991.
2. Whether, as respondent contends, depreciation of the
addition to petitioner's residence built in 1988 and 1989, which
includes a conservatory used for Broadmoor Gardens, is subject to
the restrictions of section 280A. We hold that it is.
1 For purposes of sec. 183, two or more "undertakings" may
be one "activity". Sec. 1.183-1(d)(1), Income Tax Regs. We
refer to the display gardens and farm as "undertakings" because
one of the issues in dispute is whether they were one activity.
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