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Petitioners’ 1992-94 Federal Income Tax Returns
Petitioners timely filed their 1992, 1993, and 1994 Federal
income tax returns. On their returns, petitioners reported income
from various sources, as follows:
Year Compensation Interest Schedule C United
1992 $97,089 $300,035 $126,500 $45,174
1993 409,596 162,391 --- 235,410
1994 387,786 6,007 --- 224,221
Petitioners offset this income with the following Schedule F losses
attributable to their cattle-raising and deer operations:
Year Schedule F Net Loss
1992 $211,868
1993 162,454
1994 187,951
OPINION
The issue we must decide is one of fact: whether petitioners
entered into or carried on their Schedule F activities with an
intent to make a profit. If petitioners did not have the requisite
profit motive, as respondent maintains, then all deductions
exceeding the revenue attributable to those activities would be
disallowed pursuant to section 183(a).
Respondent contends that petitioners lacked the requisite
intent to make a profit in carrying out their Schedule F
activities. In support of this position, respondent maintains (1)
petitioners failed to carry on the activities in a businesslike
manner, (2) the activities generated substantial losses over an
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