14
to increase profitability. See De Mendoza v. Commissioner, T.C.
Memo. 1994-314. This factor favors respondent.
2. Expertise of Petitioner or His Advisers
Preparing to enter into an activity by consulting with
experts or extensive study may indicate that a taxpayer has a
profit objective. Sec. 1.183-2(b)(2), Income Tax Regs.
Petitioner has no formal schooling in agriculture or
equestrian activities. His participation in equestrian
activities began during the 1970's, while his participation in
polo began around 1984. Petitioner was very involved in the polo
community, and was even a contributing editor for Polo magazine.
Although we believe he was quite knowledgeable as to polo, or
even equestrian affairs, we do not feel that he was an expert in
making equestrian affairs profitable, and it does not appear that
he had any experience or expertise in the cattle, other animals,
hay, or guest quarters business. Petitioners have failed to
establish that they sought expert advice to make the ranch
profitable. This factor favors respondent.
3. The Time and Effort Expended by Petitioner
A devotion of a great deal of a taxpayer's personal time to
an activity, especially where there is no recreational element,
may indicate a profit objective, and the fact that only a limited
amount of time is so devoted does not necessarily give rise to a
contrary indication. Sec. 1.183-2(b)(3), Income Tax Regs.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011