Publication Date - July 2006

NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.

Chapter Five / Table of Contents / Chapter Seven
Tax Code, Regulations and Official Guidance Search

Chapter Six - Raisin Grapes

• Overview of Industry
• Growing Production Cycle for a Mature Vineyard
• Development of a New Vineyard
• Mature Productive Operating Vineyard
• Method of Accounting
• Rancher or Farmer
• Gross Income
• Expenses and Depreciation
• Related Party Transactions
• Exhibit A: Cites for Code, Regulations, Revenue Rulings and Court Cases

Rancher or Farmer

These terms are used interchangeably. In California there is a tendency to refer to this not as a farm, but as a “raisin ranch.” A raisin rancher can be anyone. It could be a hands-on rancher living on his ranch, making all the decisions, doing his own pruning, acting as his own farm labor contractor, etc. The contrasting situation is an absentee raisin rancher who may have a totally unrelated career, who manages the ranch from a desk or hires a professional ranch manager. The agent will develop the factual background during the initial interview.

Audit Techniques
The facts may support a passive loss material participation issue under IRC § 469.