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involved. These factors are not exclusive, and no single
factor or combination of factors is conclusive in
determining whether an activity is engaged in for profit.
See Dreicer v. Commissioner, 78 T.C. at 645; Vandeyacht v.
Commissioner, T.C. Memo. 1994-148; sec. 1.183-2(b), Income
Tax Regs. After considering the facts and circumstances of
this case, we conclude that petitioners did not engage in
their "farming" activity for profit. We discuss each of
these factors separately.
(1) Manner of Carrying on the Activity
Section 1.183-2(b)(1), Income Tax Regs., provides as
follows:
The fact that the taxpayer carries on the
activity in a businesslike manner and maintains
complete and accurate books and records may
indicate that the activity is engaged in for
profit. Similarly, where an activity is carried
on in a manner substantially similar to other
activities of the same nature which are
profitable, a profit motive may be indicated.
A change of operating methods, adoption of new
techniques or abandonment of unprofitable methods
in a manner consistent with an intent to improve
profitability may also indicate a profit motive.
Petitioners contend that they maintained reasonably
complete and accurate books and records of their farming
activity compared to other farmers in the locality and to
their other business activities. Petitioners' accountant,
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