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5. The Success of the Taxpayer in Carrying On Similar or
Dissimilar Activities
The fact that the taxpayer has engaged in similar activities
in the past and converted them from unprofitable to profitable
enterprises may indicate that he is engaged in the present
activity for profit, even though the activity is presently
unprofitable. Sec. 1.183-2(b)(5), Income Tax Regs.
It is uncontroverted that Mr. Abbene has never realized a
profit from his horse-related activities. Petitioners contend,
however, that Mr. Abbene successfully engaged in a dissimilar
activity as a sales representative in the chemical industry.
While the record contains no evidence, aside from Mr.
Abbene's testimony that he increased his chemical sales from $1
million to $3.5 million annually during his tenure with Pride
Chemicals, we believe that Mr. Abbene enjoyed some degree of
success as is evidenced by his substantial income. There is,
however, no evidence to suggest that Mr. Abbene's acquired
business expertise was used in the operation of Blue Ribbon.
Moreover, we see few, if any, similarities between selling
chemicals and operating a horse farm. Accordingly, we attach
minimal significance to Mr. Abbene's success as a chemical
salesman.
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