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Petitioner did not use her records to evaluate how her farm
performed. When asked if her farm was profitable based upon its
history of income and expenses, petitioner testified as follows:
I just don't know that I am really capable of analyzing
those figures. It's not my field at all. I really
hate to get into something that is so alien to me as
accounting, * * * that's why I've always given * * *
all my things to an accountant to do. I've never made
out my own income tax returns. I really don't * * *
feel capable of even analyzing these charts * * *
Petitioner testified that her position at Foxcroft increased
her ability to sell her horses. We disagree. Petitioner sold a
horse 1 month before becoming the headmistress of Foxcroft to an
Oregon buyer and gave two horses away in August 1989, but she did
not introduce any convincing evidence that she tried to sell
horses in Virginia. Petitioner's agreeing to a 5-year commitment
in Virginia and her failure to show that she tried to sell her
horses while in Virginia detract from her claim that she ran her
farm with a profit objective.
Petitioner contends that the fact that she reduced the
amount of her livestock in 1985 in response to changing market
conditions and added horticultural products in 1988 shows that
she had a profit objective. Petitioner introduced no evidence
that these changes produced any income. It is true that the
discontinuation of an unprofitable operation may suggest that the
activity was conducted in a businesslike manner. See Seebold v
Commissioner, T.C. Memo. 1988-183. However, petitioner's
reduction of her livestock in 1985 and her addition of
horticultural products in 1988 are not sufficient changes in her
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