- 8 -
in determining whether an activity is engaged in for profit: (1)
The manner in which the taxpayer carried on the activity, (2) the
expertise of the taxpayer or his advisers, (3) the time and effort
expended by the taxpayer in carrying on the activity, (4) the
expectation that assets used in the activity may appreciate in
value, (5) the success of the taxpayer in carrying on other similar
or dissimilar activities, (6) the taxpayer's history of income or
loss 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) the extent to which elements of personal pleasure
or recreation are involved. Sec. 1.183-2(b), Income Tax Regs. The
list of factors in the regulations is not exclusive, and other
factors may be considered in determining whether. an activity is
engaged in for profit. These factors are not merely a counting
device where the number of factors for or against the taxpayer is
determinative, but rather all facts and circumstances must be taken
into account, and more weight may be given to some factors than to
others. Cf. Dunn v. Commissioner, 70 T.C. 715 (1978), affd. on
another issue 615 F.2d 578 (2d Cir. 1980). Not all factors are
applicable in every case, and no one factor is controlling.
Abramson v. Commissioner, 86 T.C. 360, 371 (1986); Allen v.
Commissioner, 72 T.C. 28, 34 (1979); sec. 1.183-2(b), Income Tax
Regs.
Respondent determined that during the years in issue
petitioners, were not engaged in horse breeding and horse racing
for profit within the meaning-of section 183. We disagree.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011