- 9 - of disrepair. Many of the donated vehicles were inoperable and had not been registered for several years. Some of the vehicles were over 30 years old. CBR did not begin its formal operations at the ranch property until after the years in issue. By the end of 1998, some of the buildings and infrastructure were in place, and CBR was making final preparations to open the ranch property for its charitable purposes. In 1999, CBR began operating a program in conjunction with Remi Vista, a section 501(c)(3) organization that has operated homes for boys for approximately 27 years. OPINION The first issue we consider is whether the losses claimed in Omega’s farming activity for 1993, 1994, and 1995 were incurred in an activity carried on with an actual and honest profit objective within the meaning of section 183. Respondent determined that the activities were “not engaged in for profit” within the meaning of section 183(a). Petitioners must show that respondent’s determination is erroneous. See Welch v. Helvering, 290 U.S. 111 (1933). It does not appear that Omega engaged in regular and continuous farming activity. Instead, Omega leased the 1,400 acres of agricultural property from CBR and in turn leased the same acreage to a third party under a per-head grazing arrangement. Omega depended upon the third-party lease, some ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011