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question were engaged in for a profit. Sec. 1.183-2(b)(1),
Income Tax Regs. The record indicates that petitioners
maintained thorough accounts of revenue and expenditures
connected with Silk Oak's operations, using a computer program
recommended by their accountant. Petitioners also maintained
separate accounts for Silk Oak's finances. Respondent concedes
that petitioners maintained books and records in a businesslike
manner.
Petitioners' detailed bookkeeping does not, by itself,
indicate an intent to generate a profit. Golanty v.
Commissioner, supra at 426. A lack of profit motive may exist
where a taxpayer fails to abandon unprofitable methods, change
operations, or adopt new techniques in an attempt to improve
profitability. Sec. 1.183-2(b)(1), Income Tax Regs.
Accordingly, the maintenance of detailed books and records may
reveal the mere "trappings" of a profit business, particularly
when a taxpayer fails to produce income statements, profit plans,
or business plans created to alter operations in an attempt to
reverse mounting losses. Osteen v. Commissioner, T.C. Memo.
1993-519, affd. in part and revd. in part 62 F.3d 356 (11th Cir.
1995).
In this instance, petitioners commenced operation of Silk
Oak with neither expertise in running a profitable ranch nor a
detailed written plan fashioned to enable them to earn a profit.
Petitioners, however, contend that before conducting any ranching
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