-12-
Losses
Gross (including
Year receipts Interest depreciation) Depreciation
1983 $10,593 $9,535 ($37,950) $8,372
1984 3,875 12,574 (32,786) 4,090
1985 6,212 5,270 (35,469) 15,330
1986 16,791 -0- (189,357) 27,986
1987 152,256 92,488 (441,830) 62,513
1988 124,778 165,686 (597,344) 112,479
1989 112,918 242,162 (665,058) 153,479
1990 156,342 278,819 (618,068) 163,002
1991 229,360 207,716 (436,238) 128,721
1992 163,245 167,674 (394,552) 126,696
1993 166,079 143,677 (431,075) 61,849
1994 114,463 153,340 (418,001) 41,582
1995 117,872 197,563 (474,332) 56,055
1996 107,276 224,345 (595,778) 79,213
Respondent mailed a notice of deficiency to petitioner on
March 25, 1996. Respondent determined that Broadmoor Gardens and
petitioner's farm were separate activities and disallowed
petitioner's deductions for depreciation and other business
expenses related to Broadmoor Gardens. Petitioner timely filed
her petition on June 17, 1996.
II. OPINION
A. Whether Petitioner's Farm and Broadmoor Gardens Undertakings
Were Separate Activities
We must decide whether petitioner's farm and Broadmoor
Gardens were one or two activities in 1990 and 1991. The
applicable regulations state that, generally, the most important
factors in deciding whether two or more undertakings are operated
as one activity or separate activities are the degree of
organizational and economic interrelationship of the
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