The petitioners, a married couple, had an S corporation with an office in Virginia. The husband worked full time in the oil industry, but bought a 79-acre tract in North Carolina in 2004 and completed the construction of a warehouse on part of the property. The warehouse was built to store hops for distribution to local breweries. In 2008 and 2009, the husband planted hop seeds, but weather problems stalled crop growth and no hops were harvested or sold during these years. During this time, the husband also called local breweries to determine their interest in buying hops. The petitioners deducted business losses on Schedule C for both 2008 and 2009 related to the hop crop. The court upheld the IRS denial of Schedule C deductions because the court determined that the North Carolina activity was not functioning as a going concern in either 2008 or 2009 because the petitioners did not engage in the activity with the requisite continuity, regularity and with the primary purpose of deriving a profit. However, the court agreed with the IRS that some related expenses were deductible as personal expenses related to their investment in the North Carolina property. Powell v. Comr., T.C. Memo. 2014-235.