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action was taken to increase the receipts from the farm activity.
Petitioner testified that sometimes he did not charge Larralde
rent but instead accepted livestock in trade. Pursuant to the
existing leases, Omega was required to fix water pumps and mend
fences in order to provide adequate water and pasture for Omega’s
and Larralde’s livestock. CBR was required to fix major
mechanical failures; however, in reality, Omega paid for these
repairs and petitioner claimed the costs as charitable
contributions in the form of labor performed by Omega’s
employees.
According to petitioners, the almond trees on the property
were maintained to produce organically grown almonds that could
be sold at a higher market price than almonds that were not
produced organically. However, petitioner also testified that
the almond trees were dwarfed and stunted due to a lack of proper
care and could not be watered or chemically fertilized.
Therefore, the only way to maximize output from the almond trees
while still maintaining organic certification was to replace the
dead or stunted trees. Yet, from 1990 through 1995, Omega spent
a total of $467 on replacement trees for the orchard. We find it
difficult to envision a profitable farm activity where the very
crops from which a profit could be derived are not cared for or
replaced with regularity.
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