-10-
Expenses
Gross (Excluding
Year Receipts Depreciation) Depreciation Net Loss
1983 -- $25,793 $15,834 1$41,627
1984 $3,621 34,195 24,680 255,254
1985 3,200 20,414 26,092 43,306
1986 6,213 39,016 32,419 65,222
1987 2,745 26,096 45,084 68,435
1988 361 57,128 44,968 101,735
1989 1,013 50,905 32,915 82,807
1990 23,174 72,540 25,935 75,301
1991 20,021 70,169 16,853 67,001
1992 7,240 74,345 25,645 92,750
1993 17,162 87,921 32,637 103,396
1994 28,528 71,605 48,690 111,767
1995 14,268 72,903 53,408 112,043
1996 6,746 Unknown Unknown 111,291
1997 16,618 Unknown Unknown 97,463
1 Includes losses from a coon dog activity.
2 For 1994, petitioners also reported a capital gain
of $41 relating to the cattle activity.
For all years in issue (and apparently for all of the other
years indicated above), on petitioners’ joint Federal income tax
returns, the reported net losses from petitioners’ cattle ranch
activity offset and reduced petitioner’s substantial taxable
income from Pre-Paid Legal.
On audit, respondent determined that petitioners’ cattle
ranch activity was not operated for profit and disallowed their
claimed net losses relating thereto.
OPINION
Under section 183(b)(2), if an activity engaged in by an
individual is not engaged in for profit, deductions relating
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Last modified: May 25, 2011