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need not merely have had a profit objective before the years in
dispute. The taxpayer must possess the required objective during
each disputed year. Sec. 1.183-2(b), Income Tax Regs.; see also
Dennis v. Commissioner, T.C. Memo. 1984-4. Although a profit
intent in a prior year may be evidence of such an intent in a
later year, a prior intent will not serve as a "blank check" for
a taxpayer to continually operate a loss activity outside the
scope of section 183. See Daugherty v. Commissioner, T.C. Memo.
1983-188.
This factor favors respondent's determination.
7. Amount of occasional profits
We consider the occasional amount of profits, if any, from
the subject activity. Sec. 1.183-2(b)(7), Income Tax Regs. For
the reasons stated immediately above, we hold that this factor
favors respondent’s determination.
8. Financial status of taxpayer
We consider petitioners' financial status. See sec.
1.183-2(b)(8), Income Tax Regs. Substantial income from sources
other than an activity, particularly if the activity's losses
generated substantial tax benefits, may indicate that the
activity is not engaged in for profit. This is especially true
where there are personal or recreational elements involved.
Id.; see Jasionowski v. Commissioner, 66 T.C. 312, 322 (1976).
From 1979 to 1994, petitioners reported substantial taxable
income independent of their breeding losses. Petitioners'
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