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In 1993, the tax year in issue, petitioner’s home and place
of business in Hemet, California, was a small ranch that he had
inherited from his father in 1987. Petitioner lived in the main
house on the ranch, which also includes a guest house and a
separate office building.
In 1992, petitioner had retired from a teaching career in
Orange, California. During 1993, petitioner continued his prior
second career as a writer for profit and did his writing at the
ranch, which was both his home and his primary place of business
for his writing activity.
In 1992, petitioner also began to make the ranch available
as a retreat center. Petitioner did not maintain a separate bank
account for the retreat activity, which generated $2,336 of gross
income for 1993.
In addition to the activities in dispute, petitioner also
carried on farming activities at the ranch, raising figs and
dogs. The farming activities generated $1,325 of gross income
and $25,588 of expense deductions, with respect to which
respondent made no adjustments.
Issue 1. Depreciation in Connection With Writing and Retreat
Activities
Neither when petitioner inherited the ranch from his father
in 1987, nor at any later time, did he attempt to allocate the
basis of the ranch between land and buildings or between
buildings and furnishings, nor did he claim any deductions with
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