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services and supplying caskets for the funeral services. In
Knight-Ridder Newspapers, Inc. v. United States, 743 F.2d at
790, the Court of Appeals for the Eleventh Circuit held that a
newspaper that provided the service of presenting information to
its readers had to use the accrual method where the cost of
newsprint and ink was 17.6 percent of the total cash receipts.
In Ward AG Prods. v. Commissioner, T.C. Memo. 1998-84, affd.
without published opinion 216 F.3d 1090 (11th Cir. 2000), we
held that a taxpayer who operated a business that sold farming
seed, fertilizer, and equipment and provided certain services to
farmers was not a farming business and had to maintain
inventories and use the accrual method.
Some of petitioner’s business activities involve no growing
of trees, no harvesting of trees, and no ownership of the land
on which the trees are grown. Other business activities involve
a combination of the above. The business activities related to
buying and selling wood generate merchandise for petitioner.
The merchandise is an income-producing factor to petitioner.
Thus, the facts and circumstances of this case are analogous to
those described in Wilkinson-Beane, Inc. and Knight Ridder
Newspapers.
Petitioner must use the accrual method of accounting for
all of its business activities. See Thompson Elec., Inc. v.
Commissioner, T.C. Memo. 1995-292.
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