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previously noted, full time to oversee the operations of the
cattle activity. The record establishes that Dr. Burrus devoted
significant time to consulting with Mr. Gruen in connection with
decisionmaking for Maple Row, notwithstanding the demands of his
medical practice. When one adds to the foregoing the fact that
raising cattle generally lacks significant recreational
aspects,14 the application of section 1.183-2(b)(3), Income Tax
Regs., tends to suggest the existence of a profit objective.
4. Expectation That Assets May Appreciate
An expectation that assets used in the activity will
appreciate in value may indicate a profit objective. Golanty v.
Commissioner, 72 T.C. at 427-428; Bessenyey v. Commissioner, 45
T.C. 261, 274 (1965), affd. 379 F.2d 252 (2d Cir. 1967); Hillman
v. Commissioner, T.C. Memo. 1999-255; Dodge v. Commissioner, T.C.
Memo. 1998-89, affd. 188 F.3d 507 (6th Cir. 1999); sec. 1.183-
2(b)(4), Income Tax Regs. We have held at respondent’s behest
that petitioners’ landholding and cattle activities must be
treated as separate activities under section 1.183-1(d)(1),
Income Tax Regs., for purposes of section 183.
14 As more fully discussed in connection with the
“recreation” factor, the recreational aspects of the Cheatham
Property that find support in the record are more closely
associated with petitioners’ landholding activity than with their
cattle activity.
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