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Deductions
Income Derived Attributable
Year From Farming To Farming Net Gain (Loss)
1990 $3,737 $58,263 ($54,526)
1991 25,294 73,053 (47,759)
1992 17,705 95,714 (78,009)
1993 34,887 123,130 (88,243)
1994 40,914 94,893 (53,979)
1995 22,710 91,485 (68,775)
Since petitioners’ income derived from farming did not exceed the
deductions attributable thereto in any of the years in issue,
their farming activity--i.e., the Maple Row cattle activity--must
be treated as a separate activity from the holding of land, in
accordance with section 1.183-1(d)(1), Income Tax Regs.
Respondent concedes that petitioners’ separate activity of
holding land was an investment activity for which the allocable
expenses are deductible. (See supra note 8.) It therefore
remains for us to decide whether petitioners’ separate activity
of farming (i.e., as disaggregated under section 1.183-1(d)(1),
Income Tax Regs., from the activity of holding land) was an
activity not engaged in for profit within the meaning of section
183.
B. Application of Section 183 to Cattle Activity
Section 183(c) defines an activity not engaged in for profit
as “any activity other than one with respect to which deductions
are allowable for the taxable year under section 162 or under
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