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Moreover, the trees on the property across from petitioners’ land
looked healthy.
Petitioners sold their fiberglass business in the early
1980s for several million dollars and currently have a profitable
rental real estate activity. Petitioners consider themselves
retired. The large losses they claim from their lemon farming
activity partially offset petitioners’ substantial income from
their non-farming activities. Petitioners therefore had an
incentive to incur losses in the farming activity. See Jackson
v. Commissioner, 59 T.C. 312, 317 (1972).
Petitioners have a 6,000 square foot home on the Valley
Center property where they conduct their farming activity. Mr.
Bangs wanted to have something to do in his backyard when he
retired. Petitioners have fond memories of farming from their
youth and had always hoped to get back to farming. They were
pleased that they could do so raising citrus trees in California,
a warm climate. See id.; sec. 1.183-2(b)(9), Income Tax Regs.
We find that petitioners derived personal pleasure from their
farming activity, which is an indication that petitioners did not
engage in the activity for profit.
Based on all of the facts and circumstances, we find that
petitioners have not shown they conducted their lemon farming
activity with the primary, predominant, or principal purpose of
realizing an economic profit independent of tax savings. See
Wolf v. Commissioner, 4 F.3d at 713; Polakof v. Commissioner, 820
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