- 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 of
Page: 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