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Petitioners reported on their income tax returns the
following amounts of nonfarm income from 1982 through 1997:
Pension Nonfarm
Year Wages income income
1982 $239,580 $260,552
1983 188,900 240,135
1984 N/A N/A
1985 124,905 148,064
1986 93,500 107,521
1987 101,000 121,102
1988 70,000 78,497
1989 51,200 $38,492 101,178
1990 28,500 104,000 142,238
1991 54,000 47,000 116,373
1992 126,883 28,000 169,090
1993 119,700 24,500 157,815
1994 144,340 236,966
1995 139,390 154,309
1982-95
Total 1,481,898 241,992 2,033,840
1996 144,854 152,416
1997 144,354 170,963
1982-97
Total 1,771,106 241,992 2,357,219
Nonfarm income includes wages and proceeds from the sale of
investments and inherited property.
OPINION
A. Whether Petitioners Operated Their Farm and Horse-Breeding
Activity for Profit in 1995
The issue for decision is whether petitioners operated their
farm and horse-breeding activity for profit in 1995. A taxpayer
conducts an activity for profit if he or she does so with an
actual and honest profit objective. See Osteen v. Commissioner,
62 F.3d 356, 358 (11th Cir. 1995), affg. in part and revg. on
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