-10-
Petitioner worked on the farm and in the gardens. For
example, she delivered colts, fed calves, cut bushes, mowed,
removed the dead heads of flowers, planted flower bulbs, and
cleaned the ponds.
Petitioner's employees generally worked both on the farm and
in the gardens. However, each worker had responsibilities
related mostly to either the gardens or the farm. Petitioner
used some equipment and some of the facilities, such as the pole
barn, for both the farm and the gardens. During the years in
issue, petitioner had one bank account that she used for the
farm, Broadmoor Gardens, and for her personal expenses.
E. Petitioner's Federal Income Tax Returns and the Notice of
Deficiency
Petitioner assembled all of her records relating to
Broadmoor Gardens and her farm and gave them to Richardson to
prepare her tax returns.
Petitioner calculated that $32,850 of the $623,027 cost of
remodeling her home related to personal use. She estimated that
this was the cost of Ms. Beard's room, the bathroom (but not the
hot tub), and the closet. She began to depreciate $590,177
(i.e., $623,027 - $32,850) on her 1988 and 1989 returns under the
heading "greenhouse". Petitioner deducted the following
depreciation related to the "greenhouse" from 1988 to 1996:
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