Taxation Research Problem. The taxpayer, Hugh Ames, has been engaged in the general practice of medicine for more than 30 years. In 1991, he took over the operation of his family farm and decided to convert the farm into a cattle farm. He employed full-time help on the farm, but he himself did much of the physical work involved in improving the farm. In formulating his plans and in carrying them out, Dr. Ames had the advice and assistance of the local farm agent, an expert cattleman, and an expert farm machinery mechanic. Dr. Ames raised cattle as well as catfish and quarter horses. However, after encountering technical and demand problems, he discontinued the raising of catfish and horses. He was presently raising thoroughbreds and was confident that this venture would prove more profitable. During the period from 1991 through 2015, Dr. Ames farming operation resulted in substantial losses, averaging approximately $15,000 per year. During the taxable years of 2014 and 2015, his farm losses totaled $30,000 and $25,000 respectively. The evidence showed Dr. Ames had not made a profit, on a year-to-year basis, during this entire period, although his testimony to the IRS agent was that he always had operated and still operated his farm with a profit motive. Can Dr. Ames deduct the losses? See Gregory, Jr. v. U.S. (37AFTR2d 76-785) andLoy D. Mercer v. Commr, (67-1 USTC 9390).