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trees have matured 40 years he will make more than enough money
to cover the expenses he has incurred. While this may or may not
be true, that contention alone does not turn this activity into a
business. Petitioner is merely waiting while the trees
appreciate in value. We would expect someone who operates a
timber farm for profit to keep records regarding the specifics of
the trees, such as the date the trees were planted and the cost
of the trees that were planted, along with a business plan and
records of expenses. Experts would be consulted prior to
engaging in the activity and used thereafter as needed. A farm
would have employees to maintain and care for the trees.
Petitioner would have to spend more than one day a month on farm
activities if he had no employees. A timber farm normally would
not have a vacation house located on the property.
Factors that would tend to establish that a timber farm is
entered into for profit are clearly shown in Kurzet v.
Commissioner, T.C. Memo. 1997-54, affd. in part and revd. in part
222 F.3d 830 (10th Cir. 2000). In contrast, to describe the
amount of time and energy petitioner has put into the apple and
timber farm as an "activity" is generous. At the most,
petitioner has an investment. We also note that petitioner
deducted personal expenses for telephone, painting, and cleaning
services on the Schedule F. These are nondeductible under
section 262. When taken in conjunction, all of these factors we
have reviewed establish that petitioner does not have a profit
objective for the apple and timber activity. Petitioner did not
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