- 73 -
from the sale of organic milk could address the deficit.
Accordingly, we find this factor to be neutral.
7. Amount of Occasional Profits--Zane has not reported any
profits from the cow activity, and therefore this factor is
unfavorable for Zane.
8. Financial Status of the Taxpayer-–Without counting any
farm income Zane and Shannon’s gross income, before considering
income adjustments they conceded, was $382,020, $277,979,
$320,569, and $718,466 for the years 1998, 1999, 2000, and 2001.
For each of the next 3 years, their income exceeded $700,000.
That level of income provided the potential for substantial tax
benefits from the claimed losses from the cow and dairy farm
activity. Therefore, this factor is unfavorable for Zane and
Shannon.
9. Elements of Personal Pleasure--Although Zane has a keen
interest in cows, especially the Normande breed, his focus in
this activity has been to seek a profit from a dairy operation.
We note that the Normande breed was not traditionally used for
dairy purposes in the United States. However, Zane believed that
they had great potential for high quality and quantity
production. Unlike the dog breeding activity, we find that
Zane’s interest in the cow and dairy farm activity was more
business and less pleasure oriented.
Page: Previous 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 Next
Last modified: March 27, 2008