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circumstances of the instant case, that the activity was not a
mere "hobby." Additionally, petitioners' losses during the years
in issue were out-of-pocket economic losses. As we have
discussed, supra, we conclude that petitioners, during the years
in issue, were attempting to sustain their horse activity until
Mrs. Phillips recovered and that petitioners intended for their
horse activity, among other things, to support Mrs. Phillips in
the event that Mr. Phillips predeceased her. Accordingly, we
believe that petitioners' use of Mr. Phillips' income to aid in
sustaining the horse activity during the years in issue was
warranted, given the circumstances in which petitioners found
themselves, and does not indicate the lack of a profit objective.
Section 1.183-2(b)(9), Income Tax Regs., provides that
"The presence of personal motives in carrying on of an activity
may indicate that the activity is not engaged in for profit,
especially where there are recreational or personal elements
involved." The regulations provide that
the fact that the taxpayer derives personal pleasure
from engaging in the activity is not sufficient to
cause the activity to be classified as not engaged in
for profit if the activity is in fact engaged in for
profit as evidenced by other factors whether or not
listed in this paragraph. [Sec. 1.183-2(b)(9), Income
Tax Regs.]
Petitioners do not use the horses for personal riding
pleasure. At the time of trial, Mr. Phillips had not ridden a
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