12
T.C. 360, 371 (1986). We will consider these factors separately
in this case.
1. The Manner in Which the Ranching Activities Were
Conducted
Maintaining complete and accurate books and records may
indicate that the activity is engaged in for profit. Elliot v.
Commissioner, supra at 971-972; sec. 1.183-2(b)(1), Income Tax
Regs. Respondent contends that the records kept here were
inaccurate, contained omissions, and did not disclose the most
rudimentary information a prospective purchaser would want in
purchasing horses. Petitioner argues that the records were
adequate, that from them the C.P.A. was able to prepare
petitioners' tax returns, and that they were able to assess
profitability and respond accordingly.
The records consisted of handwritten logs kept since 1987
and typed summaries for each year. The logs contain one or two
pages for each month, and list expenditures and the method of
payment--for instance, a charge at a gas station or cash to a
veterinarian. At the end of the logs are summaries. The
summaries may not have always been accurate or complete, but may
have provided at best a rough picture of the profitability of the
ranch. We cannot judge how accurate or complete they were in
this case; they were accepted into evidence solely for showing
that petitioner kept some kind of records, not for the purpose of
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