- 9 -
$117,328. The aircraft-rental losses deducted for the contested
years, 1992 and 1993, totaled $6,907.
Year Claimed Gross Ranch Ranch Aircraft
Adjusted Income From Expenses Profits & Rental
Gross Ranch Losses Profits &
Income Losses
1990 $426,342 $0 1$890 $0 -$4,065
1991 420,991 0 1728 0 11,500
1992 446,673 0 23,714 -23,714 -2,999
1993 319,573 0 36,099 -36,099 -3,908
1994 157,390 0 26,931 -26,931 4,698
1995 63,407 0 30,584 -30,584 9,858
1996 -7,325 1,659 34,793 -33,134 2,275
1997 -96,744 33,784 39,024 -5,240 -158
1998 235,274 218,036 217,328
1 During these years, the property taxes for the ranch were deducted by
petitioners on Schedule A of their Form 1040.
2 $33,000 of the gross income in 1998 consists of consulting fees paid to
petitioner for the planning and building of a ranch. These are estimated
amounts because petitioners’ 1998 tax return had not been filed at the time of
trial.
OPINION
We must decide whether or not petitioners’ cattle ranching
and aircraft rental were activities engaged in for profit within
the meaning of section 183.
Petitioners contend that their objective with respect to
these ventures was at all times to make a profit, and that the
costs incurred were therefore properly deductible under section
162 as ordinary and necessary expenses of carrying on a trade or
business. Conversely, respondent argues that the requisite
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