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previously quoted testimony to the effect that any profit he
expected to make from Maple Row “was because of the land rather
than the herd”. Taken in context, we do not interpret Dr.
Burrus’s statement as a concession that he had no profit intent
with respect to the cattle activity. Dr. Burrus’s observations
were directed at Maple Row as a whole-–that is, both the
landholding and the cattle activity as an integrated undertaking.
In this context, Dr. Burrus’s statement reflected his judgment
that any profits from the cattle operation would never be
sufficient to cover the cost of holding the land. As he stated
in the same context:
I wasn’t worrying about making a profit from selling
the cows in the magnitude of [$]230,000 [the 1992 loss,
including land costs] * * * [Neither] Dr. Foreman nor I
ever made any profit [from cattle] that would
counteract the cost of the land.
Thus, we understand Dr. Burrus as expressing the view that,
because his land costs would dwarf what he considered to be the
realistic profit potential of the cattle operation, any overall
gain from the integrated undertaking would come from land
appreciation. However, where, as here, the landholding and
cattle breeding activities must be analyzed separately under
section 183, we do not consider Dr. Burrus’s comments directed at
the combined results of landholding and cattle breeding
activities as a concession that petitioners lacked a profit
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