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any, which are earned; (8) the financial status of the taxpayer;
and (9) elements of personal pleasure or recreation. Sec. 1.183-
2(b), Income Tax Regs.
No one factor is conclusive. Keanini v. Commsisioner, 94
T.C. 41, 47 (1990). We do not reach a decision by merely
counting factors supporting each party’s position. Dunn v.
Commissioner, 70 T.C. 715, 720 (1978), affd. on another issue 615
F.2d 578 (2d Cir. 1980). Petitioners bear the burden of proving
that they possessed the required profit objective.5 Rule 142(a);
Golanty v. Commissioner, supra at 426; Smith v. Commissioner,
T.C. Memo. 1997-503, affd. without published opinion 182 F.3d 927
(9th Cir. 1999).
Respondent does not contest that the claimed deductions were
incurred with respect to petitioners’ horse breeding activity and
NSA activity but argues that petitioners did not engage in either
activity during the years in issue with an intent to make a
profit. We agree. Because the parties argued their respective
cases by addressing each of the nine criteria enumerated in the
regulations, we follow the same approach in our discussion.
(1) Manner in Which The Taxpayer Carries on The Activity.
In this respect relevant factors include whether petitioners
maintained complete and accurate books and records, and whether
5 We note that sec. 7491 is inapplicable in this case
because petitioners’ examination commenced prior to July 22,
1998.
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