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alter their operations or their prospects of generating profits.
Golanty v. Commissioner, supra at 428. With respect to their
proposed move to Texas, petitioners have failed to introduce
specific evidence to indicate that increased profit potential
would result. For this reason, we regard petitioners'
expectations of enhancing profitability by moving to Texas as
being too speculative to support their position. Accordingly, we
find that this factor favors respondent.
2. The Expertise of Petitioners or Their Advisors
Preparing to enter into an activity by extensively studying
accepted business, economic, and scientific practices, as well as
consulting with experts, may indicate that the taxpayer has a
profit motive. Sec. 1.183-2(b)(2), Income Tax Regs. While we
have found that petitioners have knowledge of Paso Fino horses,
they did not engage in the activity with expertise about running
a profitable ranch. The record indicates that the 6- to 8-week
course in which petitioners enrolled narrowly pertained to horse
care and maintenance and did not instruct petitioners in regard
to the day-to-day operations of a profitable ranch. This factor
favors respondent.
3. The Time and Effort Expended by Petitioners in Carrying
On the Activity
Taxpayers expending substantial amounts of personal time in
conducting an activity, particularly where there is no
recreational element involved, are more likely to be deemed to
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