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years at issue, Mr. Dobbe was the president of Holland America,
and Mrs. Dobbe was the vice president, treasurer, and secretary
of Holland America. Holland America used the accrual method of
accounting and a fiscal year ended September 30 for all relevant
years.
1066 South Pekin Road
Mr. and Mrs. Dobbe have owned the property located at 1066
South Pekin Road since approximately 1981. The property consists
mostly of cropland but also includes some noncropland on which
warehouses, a shed for storing machinery, various greenhouses,
and Mr. and Mrs. Dobbe’s personal residence are located. Holland
America’s main office is attached to the side of the Dobbe
residence. The office and the residence share a common driveway.
During 1993, Mr. and Mrs. Dobbe and their children lived in the
residence year round.
From 1989 through September 30, 1991, two separate annual
written leases were in effect. The “Building Lease Agreement”
leased “that certain warehouse and shed” to Holland America “for
the purpose of packaging, storing and maintaining bulbs and cut
flowers, and maintaining equipment” for $3,500 per month. The
“Lease of Crop Land” leased the cropland for horticulture
purposes for $5,200 per month. From October 1, 1991, through
September 30, 1993, a comprehensive annual written lease replaced
the separate leases, but the categories of property covered by
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Last modified: May 25, 2011