James C. Vallette and Arleen R. Vallette - Page 11

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          indicate that the activity is not engaged in for profit.                    
          Although a series of losses at the beginning of an activity does            
          not necessarily mean that the activity was not entered into for             
          profit, such a string of losses weighs against a profit intent              
          absent unforeseen or fortuitous circumstances beyond the                    
          taxpayer's control (e.g., fire, disease, theft).  A string of               
          substantial losses over many years and the unlikelihood of                  
          turning a profit are important factors in ascertaining intent.              
          Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965), affd.                   
          379 F.2d 252 (2d Cir. 1967); see also Cannon v. Commissioner,               
          T.C. Memo. 1990-148, affd. 949 F.2d 345 (10th Cir. 1991).                   
               The start-up period for a cow-calf operation is 5 to 7                 
          years.  See Hrdlicka v. Commissioner, T.C. Memo. 1985-403.                  
          Petitioners reported a loss from their cow-calf operation for               
          16 years in a row from 1979 to 1994, totaling $1,003,746.                   
          Petitioners have not established that any of these breeding                 
          losses was due to unforeseen or fortuitus circumstances beyond              
          their control or that this stream of losses was likely to change.           
          Petitioners have also offered no evidence, other than their                 
          subjective testimony, to support their assertion that these                 
          losses were from a business.                                                
               Even if we were to assume, arguendo, that petitioners had a            
          profit objective before the subject years, we would still not be            
          persuaded that they retained this objective during the subject              
          years.  In order to fall outside the purview of section 183, one            

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