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Whether a transaction is entered into for profit is a
question of fact. The burden of proof is on petitioners to show
that petitioner entered into the transaction primarily for
profit. Rule 142(a). Greater weight is accorded objective facts
than is given to petitioner's self-serving statements
characterizing her intent. Fox v. Commissioner, supra; Siegel v.
Commissioner, 78 T.C. 659, 699 (1982); Engdahl v. Commissioner,
72 T.C. 659, 666 (1979).
Taking petitioner's testimony as presented, there is simply
very little to suggest that the decision to produce and sell a
foal was made primarily for profit purposes. Petitioner
testified that she did not purchase Sassy with the intent to
breed her. We must assume from that testimony that her
investigation and beliefs with respect to Sassy's heritage were
more in connection with Sassy's performance riding than with the
horse's breeding potential. Petitioner's only testimony with
respect to a profit intent came in the form of the following
generalized responses to a series of questions put to her during
direct examination:
Q Prior to actually breeding Sassy did you
investigate how much you'd be able to sell
a foal for?
A Well, the market at the time was quite strong
when I bought Sassy. She was $10,000. She
was four. So ...
Q She was age four?
A She was age four. A three- or four-year old you
could command 8,000 to 10,000.
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