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Appeals for the Fifth Circuit, to which this case is appealable,
has stated that taxpayers whose activities are challenged under
section 183 "bear the burden of proving that their activities
* * * were engaged in with the primary purpose of earning a
profit." Westbrook v. Commissioner, 68 F.3d 868, 876 (5th Cir.
1995), affg. per curiam T.C. Memo. 1993-634. (Emphasis added.)
Section 1.183-2(b), Income Tax Regs., sets forth a
nonexclusive list of factors that should normally be taken into
account in determining whether the requisite profit objective has
been shown. The factors are: (1) 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; (4)
expectation that assets used in activity may appreciate in value;
(5) the success of the taxpayer in carrying on 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, which are earned; (8) the financial status of
the taxpayer; and (9) elements of personal pleasure or
recreation. No single factor is determinative. Sec. 1.183-2(b),
Income Tax Regs.
Petitioners argue that their horse-related activities were
engaged in for profit because they were trying, albeit with
limited success, to develop a championship quality cutting horse
stallion that would appreciate in value substantially and command
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