- 71 - the operation of the cow activity in a businesslike manner. Accordingly, this factor is favorable for Zane. 2. Taxpayer’s Expertise--Through study, Zane gained expertise in the breeding of cows and in the use of Normande cows for dairy purposes. He sought professional advice and successfully used in the cow activity his animal husbandry expertise gained from breeding dogs. Overall, this factor is favorable for Zane. 3. Time and Effort Spent in Conducting the Activity--Zane spent an average of 20 to 30 hours per week on his cow and dairy farm activity. Certainly, 20 to 30 hours per week is significant. Accordingly, this factor favors Zane. 4. Expectation That the Assets Will Appreciate in Value-- The term “profit” encompasses appreciation in the value of assets, such as land, used in the activity. Sec. 1.183-2(b)(4), Income Tax Regs. Respondent contends: farming and the holding of land with the primary intent to profit from an increase in its value will be considered a single activity only if the farming activity reduces the net cost of carrying the land for its appreciation in value. That is, they will be considered a single activity only if the income derived from farming exceeds the deductions attributable to the farming activity which are not directly attributable to the holding of the land. Zane has two separate farms, one in Hamilton, New York (Goose Hill), with approximately 400 acres purchased in 1998 for $600 to $650 per acre and currently worth around $2,500 per acrePage: Previous 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 NextLast modified: March 27, 2008