- 9 -
the economic aspects of breeding cattle; i.e., on how to make the
activity profitable, see Burger v. Commissioner, 809 F.2d at 359;
(2) read any literature on the business side of breeding cattle;
(3) performed any meaningful economic study on the profit
potential of breeding cattle; (4) prepared any market analysis on
breeding cattle; (5) established a meaningful breeding plan; or
(6) studied, or consulted with professionals on, the magnitude of
expenses which they were likely to encounter.
This factor favors neither party. We consider it neutral.
3. Time and effort spent in conducting the activity
We consider the time and effort spent by petitioners in
conducting their activity. See sec. 1.183-2(b)(3), Income Tax
Regs. The fact that a taxpayer devotes much of his or her
personal time to an activity may indicate a profit intent. The
failure of a taxpayer to devote substantial time to an activity
weighs against a profit objective, unless, for example, the
taxpayer employs capable personnel to conduct the activity in his
or her stead. Employing capable personnel shows a profit intent.
Id.
Petitioners have not persuaded us that they spent much time
in their breeding activity during the subject years. Although
the record contains some testimony establishing that petitioners
and their relatives devoted time to the activity during the
subject years, we are not persuaded that this aggregate time
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011