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that someone claiming a particular activity is motivated by
profit would not know simple but significant information such as
this with respect to that activity.
Respondent also points to numerous omissions in petitioner's
records as further support for her contention that petitioner
lacked the requisite profit motive with respect to his horse
activity. We agree. While maintaining less than precise records
does not conclusively establish the lack of a profit objective,
see Engdahl v. Commissioner, 72 T.C. 659, 666-667 (1979),
petitioner's records are so fraught with omissions and
inconsistencies that it is difficult to imagine how they served
any beneficial purpose. Petitioner's records do not reflect the
income and expenses associated with each individual horse, and
petitioner testified that he could not otherwise tell from his
records whether any one horse was profitable in any particular
year. Similarly, as noted earlier, petitioner's records do not
reflect the activity's past losses. Furthermore, petitioner
testified that the ledger contained various data pertaining to
each horse; however, respondent has shown that much of such data
is lacking from the ledger. Petitioner's drop files are equally
incomplete. In fact, petitioner failed to maintain a drop file
on several of his horses. The drop files are supposed to contain
information pertaining to registration and breeding, among other
things, but such information is lacking from several of the files
that do exist. Not only are petitioner's records incomplete,
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