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that attempt to demonstrate the actual hours they devoted to
their Limousin cattle activity during 1996 and 1997.
Petitioners filed with each of their 1996 and 1997 Federal
income tax returns, a Schedule C, Profit or Loss From Business,
for their cattle activity. For 1996, petitioners reported a
Schedule C loss of $45,833. Petitioners for 1997 reported a
Schedule C loss of $51,972.
Discussion
Because the Court decides this case without regard to the
burden of proof, section 7491 is inapplicable.
Passive Activity Losses
Section 469(a) states that a passive activity loss is not
allowed to an individual as a deduction for the year in which it
is sustained. Section 469(d)(1) defines a passive activity loss
as the amount by which (A) the aggregate losses from all passive
activities for the taxable year exceed (B) the aggregate income
from all passive activities for such year.
Passive activities are those activities which involve the
conduct of a "trade or business" in which the taxpayer does not
"materially participate." Sec. 469(c)(1). The term "trade or
business" for this purpose means any activity in connection with
any trade or business or "any activity with respect to which
expenses are allowable as a deduction under section 212." Sec.
469(c)(6)(B).
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