James C. and Vivian C. Dodge - Page 9

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               In determining whether an activity is engaged in for profit,           
          reference is made to objective standards, taking into account all           
          of the facts and circumstances of each case.  Sec. 1.183-2(a),              
          Income Tax Regs.  The regulations set forth nine criteria                   
          normally considered for this purpose.  The factors are:  (1) The            
          manner in which the taxpayer carries 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 losses with respect to the activity; (7) the           
          amount of occasional profits, if any, that are earned; (8) the              
          financial status of the taxpayer; and (9) the presence of                   
          elements of personal pleasure or recreation.  Sec. 1.183-2(b),              
          Income Tax Regs.  None of these factors is determinative, nor is            
          the decision to be made by comparing the number of factors that             
          weigh in the taxpayer's favor with the number that support the              
          Commissioner.  Id.                                                          
               Petitioners argue that they had the requisite profit                   
          objective with respect to their horse-breeding activity.                    
          Conversely, respondent asserts that the activity was not engaged            
          in for profit.  We agree with respondent.  Because the parties              







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