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attempted in order to make a profit." Ballich v. Commissioner,
T.C. Memo. 1978-497.
Petitioners assert that the fact that they utilized a
software program in order to keep track of expenses is evidence
that they carried on their dog-breeding activity in a
businesslike manner. At trial, however, Mr. Smith admitted that
there were no records kept on which, if any, of his dogs in the
kennel were profitable. Without such knowledge petitioners would
have no way of determining which dog or breed of dogs was
earning, or had the potential to earn, a profit. The lack of
detailed records as to which dogs were or were not profitable is
an indication that the dog-breeding activity was not carried on
for profit. Id.
Petitioners assert that their use of targeted advertising in
numerous trade magazines demonstrates that they conducted their
kennel in a businesslike manner. However, petitioners did not
advertise in any local medium of general circulation.
Perhaps the most important indication of whether or not an
activity is being performed in a businesslike manner is whether
or not the taxpayer implements some method for controlling
losses. Burger v. Commissioner, 809 F.2d 355, 359 (7th Cir.
1987), affg. T.C. Memo. 1985-523. Mr. Smith asserts that he
attended veterinary seminars and performed basic veterinary
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