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Petitioners contend that Mr. Abbene possessed the requisite
expertise to operate Blue Ribbon in a profitable manner, and that
he regularly consulted others who had expertise in the activity.
Respondent argues that Mr. Abbene lacked expertise with respect
to the economics of running a profitable horse farm, and that
petitioners failed to present any evidence that Mr. Abbene
consulted outside experts in an effort to improve Blue Ribbon's
profitability.
We agree with respondent. Mr. Abbene, a longstanding member
of several horseman's associations, has owned horses for most of
his adult life. We do not doubt his expertise and knowledge
about horses. Mr. Abbene's expertise, however, did not focus on
the economic aspects of the activities in which Blue Ribbon
engaged. Petitioners made no showing that Mr. Abbene undertook a
study of the accepted business and economic practices with
respect to the activities of his horse farm or that he consulted
with outside experts concerning the profitability of Blue Ribbon.
Petitioners failed to show that Mr. Abbene sought or acquired the
expertise that would enable him to turn his horse farm into a
profitable business. See Golanty v. Commissioner, supra at 432.
The failure to seek professional advice is another factor that
indicates a lack of profit motive. Id.
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