But Paul C. Wondries and Patricia Wondries, T. C. Memo. 2023-5, filed 1/9/23, managed to find Mr. Palm, ranchero extraordinaire, to manage their multi-millon-dollar cattle ranch. Even though said ranch ended up with neither hat nor cattle, but with a bushelbasketful of operating losses, Paul and Pat shoot the “goofy regulation” slalom, and get their loss deductions from Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan.
Paul is a turnaround king in the car business. Starting with one dealership, he bought fourteen (count ’em, fourteen) losing dealerships and turned around a dozen, T. C. Memo. 2023-5, at p. 11. He was making heavy-duty money from his car business, which he needed, as the ranch was hemorrhaging cash. The drought that came after he bought the ranch, and the inability to use the ranch for trophy hunting, didn’t count for post-purchase unforseeables, but rather poor planning, so no help there.
But Mr. Palm the manager saves the day. Mr. Palm had a great track record managing cattle ranches, and Paul kept records and oversight sufficient to show that he meant business. And he didn’t have too much fun, although that was a close-run thing.
My colleague Peter Reilly, CPA, can add this to his list of successful defenses to the hobby-loss attack, the Great Manager countergambit.
Taishoff Law 
Seems like the IRS whiffed if they didn’t also attack it as a passive activity since the fella was managing the operation, not them.
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