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spent substantial time participating in their horse breeding and
horse racing activities. Petitioners argue, therefore, that they
engaged in their horse breeding and horse racing activities for
profit.
Respondent argues, among other things, that petitioners did
not operate their horse breeding and horse racing activities in a
businesslike manner, that petitioners were not experts in the
breeding and racing of horses, and that losses incurred by
petitioners in 1988 with respect to both activities were not
incurred in an activity engaged in by petitioners for profit.
We agree with respondent. Petitioners advertised their
horses for sale in only 2 of the 10 years during which they
engaged in their horse breeding and horse racing activities. The
fact that petitioners hired trainers, purchased horses, and read
periodicals and manuals is equally consistent with engaging in an
activity as a hobby and is insufficient in this case to establish
a good faith profit objective. Rule 142; Golanty v.
Commissioner, supra at 430; Tripi v. Commissioner, T.C. Memo.
1983-483. Petitioners did not operate their horse breeding and
horse racing activities in a businesslike manner. Sec. 1.183-
2(b)(1), Income Tax Regs.
Petitioners devoted a minimal amount of time to their horse
breeding and horse racing activities. Sec. 1.183-2(b)(3), Income
Tax Regs.
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