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to substantiate items, maintain required records, and cooperate
fully with respondent’s reasonable requests. In addition,
petitioner is not entitled to a presumption that his horse
activity is engaged in for profit under section 183(d) because
petitioner’s gross income from his horse activity has not
exceeded deductions for any 2 years in the period of 7
consecutive taxable years ending with the first of the years in
issue. Sec. 183(d). Thus, petitioner has the burden of proving
that respondent’s determination is incorrect and that he is
entitled to the claimed losses from his horse activity.
The deductibility of a taxpayer’s expenses attributable to
an income-producing activity depends upon whether that activity
was engaged in for profit. See secs. 162, 183, 212. Section 162
provides that a taxpayer who is carrying on a trade or business
may deduct ordinary and necessary expenses incurred in connection
with the operation of the business. Section 212 provides a
deduction for expenses paid or incurred in connection with an
activity engaged in for the production or collection of income,
or for the management, conservation, or maintenance of property
held for the production of income. Section 183 specifically
precludes deductions for activities “not engaged in for profit”
except to the extent of the gross income derived from such
activities. Secs. 183(a) and (b)(2). For example, deductions
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