Petitioner, a sole owner of an S corporation, purchased a farm and invested time and money to develop the farm in 2008 and 2009. When petitioners sold the farm, they reported business loss and deducted the loss. IRS issued a notice of deficiency to petitioners.
Tax Court held, among others, that petitioners were not engaged in business because they failed to prove that they were “involved in the activity with continuity, regularity and the primary purpose of deriving a profit.”
Posted by Jin Keol Park, Associate Editor, Wealth Strategies Journal