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reverse the tide, adds further support to our belief that
petitioners were, at best, indifferent as to whether the losing
trend could be reversed. See Ranciato v. Commissioner, supra at
26.
This factor favors respondent's determination.
2. Expertise of taxpayers
We consider the expertise of petitioners with respect to
their activity. See sec. 1.183-2(b)(2), Income Tax Regs. A
taxpayer's expertise, research, and study of an activity, as well
as his or her consultation with experts, is indicative of a
profit intent with respect thereto. Id. In preparing for an
activity, a taxpayer need not make a formal market study, but he
or she should undertake a basic investigation of the factors that
would affect the activity’s profitability. Underwood v.
Commissioner, T.C. Memo. 1989-625; Burger v. Commissioner, T.C.
Memo. 1985-523, affd. 809 F.2d 355 (7th Cir. 1987).
Mr. Vallette’s prior experiences with cattle made him
knowledgeable on the subject. The mere fact that he was skilled
in the cattle industry, however, does not mean that petitioners
began or continued their breeding activity for profit. Our
careful review of this factor suggests that the weight of
Mr. Vallette’s expertise and hands-on experience was offset by
petitioners’ lack of knowledge on the economics of the cattle
breeding industry. Among other things, the record does not
suggest that petitioners: (1) Sought any professional advice on
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