Please read Ethics & Equity When is a Dairy Farm a Trade or Business. (See below) Is the position by Randolph defensible? Review the 9 factors considered to help determine whether an operation should be considered a business or hobby. You may also want to do some outside internet research on the subject, include in your own words and cite your sources.

Instructions:
– Write a detailed memo to Randolph in Word with your research findings to properly advise him on this matter. Your memo will likely be several pages.

To receive full credit your memo should satisfy the following three bullet points:
– Address the majority of the 9 factors and indicate to Randolph whether each factor is supportive or not supportive of his farming operation being considered a business.
-Based on your analysis of these factors, make an overall conclusion to Randolph.
– Memo should exceed 1000 words not including references
Grading:
Submissions that address all the items indicated above will receive full credit. Submissions that do not individually address the majority of the 9 factors and make a conclusion or do not exceed 1000 words will receive half credit.
Note: Make sure that you do not copy and paste information from other sources as this is your research and your work and I want to see your words.Your Turn It In similarity % should be less than 15% to receive a grade.


– Post your memo via Turn It In by Wednesday, October 26th by 11:59pm.

Ethics & Equity When is a Dairy Farm a Trade or Business.
Randolph has been an orthopedic surgeon in New Orleans for 15 years. He would like to devote less time to his medical practice, spend more time with his family, and pay less income tax. His net income from his medical practice has been about $500,000 per year for the past five years. Randolph grew up on a dairy farm in southeastern Louisiana. He has many fond memories of his childhood and believes a farm would be an excellent environment for his three children. Randolph purchases a dairy farm across Lake Pontchartrain from New Orleans. He hires two full-time employees to handle the milking operations and other part-time employees as needed. In addition, Randolph and his family participate in performing various activities on the farm.
Randolph commutes to New Orleans four days a week to continue his medical practice. Because he is devoting less time to the practice, his net income decreases to $400,000. Randolph has a loss of $75,000 for the dairy farm that he attributes to depressed milk prices and his inexperience at running the farm. He considers the medical practice and the dairy farm to be separate trades or businesses. Therefore, on the Federal income tax return, the $75,000 net loss is offset against the $400,000 net income. Assume that the net income and net loss from the medical practice and the dairy farm, respectively, remainapproximatelythesameforthenextfouryears. Is the position adopted by Randolph defensible? Discuss.