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petitioner has engaged in this type of activity before.
We consider the taxpayer's history of income or losses with
respect to the activity. Petitioner's farming activities have
not generated a profit since their inception in 1979. In 1993,
1994, and 1995, petitioner's reported farming expenses were
$49,876, $42,218 and $49,938, respectively, and farming income
was $3,373, $3,372, and $3,833, respectively. Even if we exclude
the deductions for mortgage interest and property taxes that were
properly reportable on Schedule A, the expenses for all three
years greatly exceed the income.
We consider the amount of occasional profits, if any, which
are earned. Substantial profit, though only occasional, is
generally indicative of a profit objective if the losses are
comparatively small. Sec. 1.183-2(b)(7), Income Tax Regs. As we
have set forth above, petitioner has a history of losses.
Petitioner contends that he will make more than enough revenue
from the sale of the trees to cover the farming expenses incurred
over the 40 year growing period. The evidence presented to
substantiate this contention is minimal. Moreover, petitioner
has yet to sell a single tree even though some of the trees must
have reached maturity during the past 20 years, because the
forest was already in existence when petitioner bought the
property. Nonetheless, we find that the trees are of increasing
value, and we take that into consideration.
We consider the financial status of the taxpayer.
"Substantial income from sources other than the activity
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