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One further item bearing upon petitioners’ income and
finances for the contested years was the rental of a personal
aircraft. Petitioner owned a 1979 Turbo Dakota plane. This
aircraft was both flown by petitioner for his personal use and
rented to SRMC for business use. Petitioner kept a handwritten
log of flight times, which indicated the number of hours flown
and the purpose of the usage. In 1992 and 1993, the years as to
which respondent disallowed plane losses, trips labeled business
accounted for an approximate 17 to 22 percent of the total usage.
Travel related to the ranch ranged between three-fourths and two-
thirds of the total hours. The remaining time was apparently
devoted to other personal use, as no evidence was presented of
rentals, or attempts to rent, to additional third parties.
Petitioner charged SRMC an hourly lease rate when the
company utilized the plane for traveling to customer premises.
He set the price by calling local businesses that rent aircraft
and inquiring what they charged for similar machines. He then
established a price consistent with the local market. Using this
practice, petitioner’s aircraft-rental operations reported losses
in 1990, 1992, 1993, and 1997. Profits were generated in 1991,
1994, 1995, and 1996.
The overall financial impact of the circumstances related
above is summarized in the following table. The ranch losses
deducted for 1992 through 1995, the years at issue, totaled
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