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presence of elements of personal pleasure or recreation. See
Nichols v. Commissioner, T.C. Memo. 1990-546. None of these
factors alone is necessarily controlling, nor is any mathematical
preponderance of factors determinative. Osteen v. Commissioner,
supra at 358. Petitioner bears the burden of proving the
requisite profit motive. Allen v. Commissioner, 72 T.C. 28, 34
(1979).
During the tax years at issue petitioner did not realize a
profit on the orange grove, and he did not receive any income
attributable to that activity.69 At trial, petitioner did not
know how many crates of oranges he produced from the orange grove
during the years at issue, and he could only testify that it
“seems like ‘87, I sold a few oranges.” Petitioner did not know
how much fruit he had picked. Petitioner also testified:
Q Did you do it hoping you would make money
eventually?
A Oh, yes. And I eventually will. I’ve been hit a
couple of hard times by the freeze. And, particularly,
the time that we have in question, the irrigation
system was a mess and I had to bring in Mrs. Ray’s
husband and they came in and straightened it out.
There was a problem with the pump. I had to replace
the pump just to get it up and going.
But, unfortunately, what happens though, is I kind
of get it up and going and either a freeze came along,
like in ‘85, and just about killing everything. That
set me back for a couple years.
69A history of unexplained losses over an extended period is
persuasive evidence of the absence of a profit motivation,
especially where the taxpayer has substantial independent sources
of income. Allen v. Commissioner, 72 T.C. 28, 34 (1979).
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