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is dispositive. Golanty v. Commissioner, supra at 426. The nine
factors are: (1) The manner in which the taxpayer carries on the
activity; (2) the expertise of the taxpayer or his advisors; (3)
the time and effort expended by the taxpayer in carrying on the
activity; (4) the expectation that the assets used in the
activity may appreciate in value; (5) the success of the taxpayer
in carrying on other similar or dissimilar activities; (6) the
taxpayer's history of income or losses with respect to the
activity; (7) the amount of occasional profits, if any, that are
earned; (8) the financial status of the taxpayer; and (9) the
elements of personal pleasure or recreation involved in the
activity. Sec. 1.183-2(b), Income Tax Regs.
After considering the evidence in this case, we conclude
that petitioners engaged in the Activity with the actual and
honest objective of making a profit.
I. Businesslike Manner
The fact that a taxpayer carries on an activity in a
businesslike manner and maintains complete and accurate books and
records may indicate that the activity was carried on for profit.
Sec. 1.183-2(b)(1), Income Tax Regs. Further, abandonment of
unprofitable methods in a manner consistent with an intent to
improve profitability may indicate a profit objective. Id.
Several factors indicate that petitioners carried on the
Activity in a businesslike manner. Mrs. Dawson kept books and
records for the business. Petitioners also maintained a separate
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