- 14 - several hours each morning caring for his horses prior to going to his full-time job. Petitioner also testified that he spent several hours each night similarly caring for his horses. Petitioner further testified that on numerous occasions the nature of his work kept him at the boarding facility until midnight. On many of these occasions, rather than commute to his residence only to commute back to the boarding facility 4 or 5 hours later, petitioner testified that he slept in his automobile at the boarding facility. Fourth, an expectation that assets used in the activity may appreciate in value may be an indication of a profit objective. Engdahl v. Commissioner, 72 T.C. at 668; Anderson v. Commissioner, T.C. Memo. 1992-102; sec. 1.183-2(b)(4), Income Tax Regs. The expectation that he would experience appreciation in the value of his horses was a principal factor underlying petitioner's motivation for maintaining his horses. During the early years of his operation, petitioner concentrated on racing. In doing so, petitioner may have been somewhat less inclined to expect his horses to appreciate in value. But petitioner altered the focus of his activity and began concentrating heavily on breeding. Here asset appreciation was petitioner's principal expectation. Petitioner studied pedigree records in order to determine what he believed to be good breeding combinations. Petitioner, as would seem customary among horse breeders, expected that it was through this system of selective breedingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011