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Under its terms, the above rule applies only where
"land is purchased or held primarily with the intent to
profit from increase in its value". See Engdahl v.
Commissioner, 72 T.C. 659, 668 n.4 (1979); Eldridge v.
Commissioner, T.C. Memo. 1995-384; Hoyle v. Commissioner,
T.C. Memo. 1994-592; Harston v. Commissioner, T.C. Memo.
1990-538, affd. without published opinion 936 F.2d 570 (5th
Cir. 1991); Fields v. Commissioner, T.C. Memo. 1981-550;
sec. 1.183-1(d)(1), Income Tax Regs. "If the taxpayer's
primary intent is not to profit from appreciation of the
land, then the general rule of the regulation applies in
determining whether there is a single activity." Hoyle v.
Commissioner, supra. Under the general rule, all facts and
circumstances are taken into account in determining whether
several undertakings constitute one activity for purposes
of section 183.
In this case, we find that petitioners' primary intent
was not to profit from the increase in the value of the
land used to conduct their horse breeding and boarding.
Rather, petitioners' primary intent was to breed and board
horses. Cf. Fields v. Commissioner, supra. In determining
whether petitioners' horse breeding and boarding and their
holding of the land constitute a single activity, we apply
the general rule contained in section 1.183-1(d)(1), Income
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