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Year Income1 Expenses2 Profit (Loss)
1996 $29,967 $190,053 ($160,086)
1997 46,890 193,053 (146,163)
1998 61,698 220,154 (158,456)
1999 44,621 210,005 (165,384)
1 In addition to livestock sales, includes tobacco allotment income and income
from the rental of houses located on the Maple Row properties. The latter income
was reported on the “Other income” line of the Schedules F for 1996 to 1999 as
follows:
Year Other Income - Schedule F
1996 $8,506
1997 6,903
1998 9,906
1999 9,720
2 Includes amounts reported by petitioners on Schedules F for 1996 to 1999 as
mortgage interest, taxes, depreciation, and conservation expenses as follows:
Mortgage Conservation
Year Interest Taxes Depreciation Expenses
1996 $56,627 $15,982 $25,233 –-
1997 61,413 11,537 22,939 –-
1998 57,454 12,309 25,860 --
1999 54,861 12,172 27,318 $8,061
Petitioners also owned and operated a shopping center in
Sumner County, Tennessee, called “Maple Row Center” (MRC) during
the years in issue. MRC’s several retail spaces were leased to
tenants, and day-to-day operations were managed by a property
manager. MRC was nearly breaking even when petitioners purchased
it in 1987, and it was operating at a slight profit by the time
of trial.
In the notice of deficiency, respondent determined that the
farming activities reflected on petitioners’ Schedules F for the
years in issue were not activities engaged in for profit and that
the reported farm losses therefrom should be disallowed under
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