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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).
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