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An individual’s expectation of profit need not be reasonable, but
he or she must have a good faith objective of making a profit.
Allen v. Commissioner, 72 T.C. 28, 33 (1979); sec. 1.183-2(a),
Income Tax Regs. Whether a taxpayer conducts an activity with
the requisite profit objective rests on the facts of the case.
Golanty v. Commissioner, 72 T.C. 411, 426 (1979), affd. without
published opinion 647 F.2d 170 (9th Cir. 1981). More weight is
given to the objective facts than to an individual's subjective
expression of his or her intent. Sec. 1.183-2(a), Income Tax
Regs. Because respondent determined that petitioners’ breeding
activity was not engaged in for profit, petitioners must prove
that respondent's determination is in error. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933); Westbrook v.
Commissioner, supra at 876. Petitioners rely almost exclusively
on their limited testimony, which focuses mainly on taxable years
preceding the years in issue, as well as the scant testimony of
Stephen and Kim, which also is aimed primarily at prior years.
The only exhibits in evidence are: (1) Petitioners’ 1979 through
1994 Forms 1040 and (2) the subject notice of deficiency. The
parties stipulated to minimal facts, and all of these stipulated
facts are best described as favorable to respondent.
We are aided by the following nonexclusive factors in
deciding whether an activity is engaged in for profit: (1) The
manner in which the taxpayer carries on the activity; (2) the
expertise of the taxpayer or his or her adviser; (3) the time and
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