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horses. It is necessary, however, that the objective be to
realize a profit on the entire operation. Bessenyey v.
Commissioner, 45 T.C. 261, 274 (1965), affd. 379 F.2d 252 (2d
Cir. 1967). This would require future net earnings and
appreciation sufficient to recoup the $622,301 of losses reported
for 1983 through 1995. Petitioners failed to produce any
evidence to show that their activity had a reasonable chance of
recovering losses reported.
5. Taxpayer's Success in Similar or Dissimilar Activities
We next consider petitioners' prior experience in similar or
dissimilar activities. Sec. 1.183-2(b)(5), Income Tax Regs.
Although an activity is unprofitable, the fact that a taxpayer
has previously converted similar activities from unprofitable to
profitable enterprises may be an indication of a profit motive
with respect to the current activity. Id.
Mrs. Dodge started an accounting and service business in
1991 that generated a profit during the years at issue. Mr.
Dodge operated a successful law practice during the years in
issue. Petitioners had successful business-type experience.
Petitioners did not show that their acquired business expertise
was used in the horse activity.
6. The Activity's History of Income and/or Losses
An important consideration is petitioners' history of income
and/or losses with respect to their horse-breeding activity.
Sec. 1.183-2(b)(6), Income Tax Regs. Losses continuing beyond
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