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OPINION
GERBER, Judge: Respondent determined income tax
deficiencies for petitioners’ 1999 and 2000 tax years in the
amounts of $12,339 and $5,473, respectively. The deficiencies
are solely attributable to respondent’s adjustments to items
connected with petitioners’ farming activity, which involved the
growing of grapes for the production of wine. The issues
remaining for our consideration involve the class life and
depreciation recovery periods for three different assets used by
petitioners in their farming activity. In particular we consider
whether petitioners’ wine grape trellises, irrigation systems,
and/or well should be depreciated as land improvements, as
determined by respondent (20-year class life) or as agricultural
equipment, as claimed by petitioners (10-year class life).
Background
Petitioners are husband and wife and resided in Geyserville,
California, at the time their petition was filed in this case.
Petitioners have operated, as a sole proprietorship, the
Trentadue Winery and Vineyards (farm property) primarily in the
immediate vicinity of their personal residence. In addition to
petitioners’ residence, the farm property includes a winery, a
vineyard, an event center, and a well. During 1999 and 2000, the
vineyard consisted of approximately 85 acres planted with
grapevines. Petitioners sell approximately 75 percent of their
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