Valmore H. Monette and Nannie B. Monette v. Commissioner of Internal Revenue

The individual taxpayers and a number of controlled corporations prevailed in the Tax Court on a number of issues, but the Tax Court sustained the Commissioner’s disallowance of farm losses as deductions on the income tax return of the individual taxpayer and his wife. 1

Here, in spite of consistent and very substantial losses of the farm and the relatively small gross receipts it produced, it is contended that the farm was a business venture and not a hobby. Additionally, it is contended that the expense of operation of the farm was an ordinary expense incident to Monette’s individual…