Steven F. and Kathryn A. Dawson - Page 13

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          personal pleasure from the Activity.  Mr. Dawson admitted that he           
          occasionally rode the horses at his home to keep them warmed up.            
          As a result, respondent contends that petitioners derived                   
          personal pleasure from the Activity.  This contention, however,             
          is not supported by the record.                                             
               Mr. Dawson testified that neither he nor his family ever               
          rode the horses for pleasure, and Mr. Barton confirmed that he              
          was not aware of any member of Mr. Dawson's family riding the               
          horses for pleasure.  Further, even if Mr. Dawson did derive some           
          satisfaction from the Activity, that is not determinative of the            
          issue in this case.  A taxpayer can enjoy his work and still be             
          engaged in it for profit.  See Jackson v. Commissioner, 59 T.C.             
          312, 317 (1972) (stating that "a business will not be turned into           
          a hobby merely because the owner finds it pleasurable; suffering            
          has never been made a prerequisite to deductibility"); Hart v.              
          Commissioner, T.C. Memo. 1995-55 (same).  The requirement is that           
          a profit objective be the "basic and dominant" objective.                   
          Independent Elec. Supply, Inc. v. Commissioner, 781 F.2d at 726.            
          We conclude that it was.                                                    
          IX.  Past Successes in Activity                                             
               The taxpayer's past success in similar or dissimilar                   
          activities can be indicative of a profit objective.  Sec.                   
          1.183-2(b)(5), Income Tax Regs.  Respondent contends that the               
          fact that petitioners have never conducted a successful horse               

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