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opinion 103 F.3d 129 (6th Cir. 1996). Significantly, petitioners
did not seek professional economic or accounting advice on the
economic aspects of breeding dogs. Other than Mr. Smith's rough
estimation of potential gross receipts, they made no analysis or
plan for earning a profit from breeding dogs, or even considered
potential costs. Most important, they did not analyze or consult
about the amount of expenses that they were likely to incur. The
failure to seek professional advice is another factor that
indicates a lack of profit motive. Burger v. Commissioner,
supra.
3. Time and Effort Spent in Conducting the Activity
We next consider the time and effort spent by petitioners in
conducting their dog-breeding activity. Sec. 1.183-2(b)(3),
Income Tax Regs. The fact that the taxpayer devotes much of his
personal time and effort to carrying on an activity, particularly
if the activity does not have substantial personal or
recreational aspects, may indicate an intention to derive a
profit. Id.
The record indicates that Mr. Smith spent approximately 8 to
10 hours per week, and Mrs. Smith spent approximately 12 hours
per week in keeping and caring for the dogs. Accordingly, we
find that significant time and effort were spent by the couple in
carrying on the activity. However, we also discern that
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