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regularly consulted with Mil Barton. Mr. Barton, with his 40
years of experience in the horse breeding and showing business,
advised petitioners on how to breed a successful horse and how to
make a profit in the Activity. In addition, petitioners hired
veterinarians and trainers to board and care for their horses.
These facts are consistent with petitioners' intention to make a
profit.
III. Time Devoted to the Activity
The fact that a taxpayer devotes substantial personal time
and effort to carrying on an activity may indicate an intention
to derive a profit. Sec. 1.183-2(b)(3), Income Tax Regs. The
fact that the taxpayer devotes a limited amount of time to an
activity, however, does not necessarily indicate a lack of profit
objective where the taxpayer employs competent and qualified
persons to carry on the activity. Id.
Petitioners did not personally devote a substantial amount
of time to the Activity. They did, however, hire competent and
qualified persons to assist them in conducting the Activity.
Petitioners hired Mil Barton and Mike Van Leuven to perform the
training necessary to produce a quality show horse. Mr. Barton
fed and cared for Hot Twist and attended horse shows with Hot
Twist when Mr. Dawson could not attend. As discussed above, Mr.
Barton was competent and qualified in the horse breeding and
showing business. As a result, the fact that petitioners did not
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