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not plant the first pecan trees until 1995 when their retirement
home was completed. Further, petitioners failed to show that had
events beyond their control not occurred their ranches would have
been profitable. Accordingly, these factors weigh against
petitioners.
G. The Taxpayer’s Financial Status
Substantial income from sources other than the activity in
question, particularly if the activity’s losses generate
substantial tax benefits, may indicate that the activity is not
engaged in for profit. See sec. 1.183-2(b)(8), Income Tax Regs.
Petitioners generated significant income from their medical
practices which enabled them to afford the upkeep on the four
properties. This factor indicates a lack of profit objective.
H. Personal Pleasure
The absence of personal pleasure or recreation relating to
the activity in question may indicate the presence of a profit
objective. See sec. 1.183-2(b)(9), Income Tax Regs. In the case
of ranching activities, however, because personal enjoyment can
coexist with demanding physical labor, this factor does “little
to advance or detract from [petitioners’] position.” Wesinger v.
Commissioner, T.C. Memo. 1999-372. As to petitioners’ farming
activity, we note that petitioners constructed a large and
beautiful retirement home at the Kerrville ranch in the heart of
the Texas hill country. At a minimum, we find that this factor
does not advance petitioners’ argument that they conducted their
ranching and farming activities with a profit motive.
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