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activity; (4) expectation that the assets used in the
activity may appreciate in value; (5) the success of the
taxpayer in carrying on similar or dissimilar activities;
(6) the taxpayer's history of income or losses with respect
to the activity; (7) the amount of occasional profits, if
any, which are earned; (8) the financial status of the
taxpayer; and (9) elements of personal pleasure or
recreation involved. See also Smith v. Commissioner, 937
F.2d 1089, 1093 (6th Cir. 1991), revg. 91 T.C. 733 (1988).
These factors are not exclusive, and no single factor or
number 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.
1. Manner in Which the Taxpayer Carried On the Activity
Petitioners did not have a formal business plan or
income projection prior to the time they began their horse
breeding and boarding operation. Petitioners also did not
introduce any of their financial books or records into
evidence. Petitioners testified that during the initial
stages of their operation, they simply retained receipts
and invoices arising from the activity in a box, which they
sorted with their accountant at the end of the year to
calculate their income tax liability. Both petitioners
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