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that which would be expected from someone who was motivated
primarily by a profit objective. Throughout all the years of
continuous losses, petitioners did not materially alter their
mode of operation. Petitioners maintained two full-time jobs and
had access to sufficient property with which they could maintain
a number of racehorses that they personally enjoyed breeding and
racing.
Based on the entire record, we are not convinced that
petitioners' primary objective was to make a profit. Rather, the
evidence is more consistent with the conclusion that petitioners
enjoyed breeding and racing their horses and, therefore, were
willing to sustain continuing losses despite the improbability of
profits. Consequently, we hold that petitioners' horse racing
and breeding activity was not primarily engaged in for profit
within the meaning of section 183(c).
Respondent also determined additions to tax under section
6651(a)(1) for petitioners' failure to file their 1987 through
1990 returns. Section 6651(a)(1) imposes an addition to tax of 5
percent of the amount of the tax due for each month a return is
delinquent, up to a maximum of 25 percent. The addition to tax
is not applicable if it is shown that the failure is due to
reasonable cause and not willful neglect. Sec. 6651(a)(1);
United States v. Boyle, 469 U.S. 241, 245 (1985). Petitioners
have the burden of proving that their failure to file was due to
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