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Petitioners did not hire any ranch consultants to assist in
managing the cattle ranch. Petitioners did not belong to a
cattlemen’s association.
During the years in issue and in prior years, petitioners
maintained no formal books and records relating to the cattle
ranch, no records of the cattle inventory, and no ledgers,
written business plans, or written cost analyses. Petitioners
maintained no records of which cows were bred, nor of which cows
were calved and sold.
Petitioner did make some miscellaneous handwritten notes
about the cattle on scratch pads, which he generally kept on the
dashboard of his truck for a while before discarding.
During 1993, petitioners maintained no separate bank account
relating to the ranch activity. Rather, financial matters
relating to petitioners’ personal and family activities and to
the ranch activity were handled through the same bank account.
During 1994 and 1995, petitioners did maintain a separate bank
account for financial activity relating to the cattle ranch.
For the years in issue, petitioners retained receipts
relating to expenses incurred in connection with the cattle ranch
activity.
Petitioners estimate that as of 1999 the property and
improvements on the ranch had a market value of approximately
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