- 11 - in “Good” condition with an appraised fair market value of “$10,000". Further, on the second page of Form 8283, petitioners stated that they had acquired the partition by purchase, that they had a $10,000 adjusted basis in the partition, and that they claimed a $10,000 deduction with regard to the partition. In their 1994 tax return, petitioners failed to include Form 8283. Petitioners incorrectly claimed the noncash charitable contribution of the Suburban as a $14,850 cash charitable contribution. Petitioners also failed to obtain qualified appraisals, as defined by section 1.170A-13(c)(3), Income Tax Regs., for both charitable contributions prior to the due date of their 1993 and 1994 tax returns. On audit, petitioners provided the IRS with letters drafted (after petitioners filed their tax returns) by two appraisers. OPINION I. Ranching and Farming Activities Section 183(a) provides generally that, if an activity is not engaged in for profit, no deduction attributable to such activity shall be allowed except as provided in section 183(b).5 5 In the case of an activity not engaged in for profit, sec. 183(b)(1) allows a deduction for expenses that are otherwise deductible without regard to whether the activity is engaged in for profit. Sec. 183(b)(2) allows a deduction for expenses that would be deductible only if the activity were engaged in for profit, but only to the extent that the total gross income derived from the activity exceeds the deductions allowed under sec. 183(b)(1).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011