Donald Keith Morley and Rebecca B. Morley - Page 18

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          purpose and dominant hope and intent of making a profit within              
          the meaning of section 183.                                                 
          II.  Failure To Timely File                                                 
               The section 6651(a)(1) additions to tax for 1988, 1989, and            
          1990 were based on:  (1) The deficiencies determined by                     
          respondent (the deficiency portion); and (2) amounts petitioners            
          listed on their 1988, 1989, and 1990 Federal income tax returns             
          as due and owing (the return portion).  As a result of our                  
          holding that Mr. Morley engaged in the horse-breeding activity              
          for profit, petitioners are not liable for the 1985 through 1991            
          deficiencies.  Therefore, petitioners are not liable for the                
          amounts of the section 6651(a)(1) additions to tax attributable             
          to the deficiency portion.  As the remaining amounts of the                 
          section 6651(a)(1) additions to tax are attributable to the                 
          return portion, and not to the deficiencies, we have no                     
          jurisdiction over these additions.  See sec. 6665(b); Meyer v.              
          Commissioner, 97 T.C. 555, 562 (1991).                                      
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             for petitioners.                         












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