-17-
years at issue, petitioners failed to document the activity in
their trust-related financial records.
Petitioners do not contend that they were relying upon the
property’s value increasing for them to generate profit from the
lemon farming activity. See Bessenyey v. Commissioner, 45 T.C.
261, 274 (1965), affd. 379 F.2d 252 (2d Cir. 1967); sec. 1.183-
2(b)(4), Income Tax Regs. They do assert, however, that they
expected the lemon trees to appreciate as fruit production
increased. Selling the trees to realize this appreciation is
counter to their argument that they were selling lemons for
profit.
Petitioners succeeded in other pursuits. None was similar
to the lemon farming activity. See Haladay v. Commissioner, T.C.
Memo. 1990-45; Daugherty v. Commissioner, T.C. Memo. 1983-188.
Petitioners grew their fiberglass business into a successful
enterprise that they sold for several million dollars.
Petitioners also have a successful rental real estate and
investment operation. These activities, however, are quite
dissimilar to lemon farming. Petitioners’ success in these
dissimilar activities does not lead us to conclude that the lemon
farming activity will eventually become profitable as well. See
Haladay v. Commissioner, supra.
We find just as telling that petitioners were involved in
unprofitable businesses, all of which they abandoned. These
included jet ski manufacturing and catfish farming. Yet, unlike
the other unprofitable enterprises, petitioners have not
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