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prior to undertaking his horse activity. Respondent also
contends that petitioner's failure to formulate a credible
business or profit plan indicates that his actions were not
businesslike and that he lacked a profit motive. We agree with
both of these contentions. While the law does not require a
taxpayer to engage in extensive formalities prior to undertaking
a venture, it does require that the taxpayer conduct a basic
investigation of the factors that would affect profit. Golanty
v. Commissioner, supra at 432. Although petitioner testified
that he started his horse activity after consultation with
various professionals within the industry, such testimony was not
credible, and it appears that petitioner did little else in terms
of an investigation. Petitioner undertook his horse activity
with no concept of what his ultimate costs might be or how he
might achieve any degree of cost efficiency. Similarly,
petitioner entered and conducted his activity not knowing the
amount of revenues he could expect or what risks might impair the
generation of such revenues. It is quite likely that this stems
from his failure to consider any type of financial planning
instrument during the course of his activity. Moreover, at trial
petitioner was asked whether he was aware of the amount of losses
incurred since the inception of his horse activity. Not only was
petitioner unaware of the amount of total losses incurred, but he
was also unaware of the amount of losses incurred during 1993,
the year immediately prior to trial. It seems to us peculiar
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