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profits from breeding fees and greater appreciation potential in
a champion stallion, would undergo the greater difficulties of
riding or showing stallions in cutting horse competitions.
Expertise of Petitioners
Preparation for an activity by extensive study or
consultation with experts may indicate a profit motive where the
taxpayer conducts the activity in accordance with such study or
advice. Sec. 1.183-2(b)(2), Income Tax Regs. We believe the
record amply demonstrates that Mrs. Sullivan developed expertise
in cutting horse bloodlines, breeding, and showing. She attended
several clinics over the years, read industry publications, and
followed the advice of acknowledged experts with respect to the
breeding, training, and showing of horses. She held leadership
and judging positions with various equine organizations over many
years. However, expertise with respect to the breeding and
showing of horses and other animals is to be distinguished from
expertise in the economics of these undertakings. See, e.g.,
Burger v. Commissioner, 809 F.2d at 359; Surridge v.
Commissioner, T.C. Memo. 1998-304; Dodge v. Commissioner, T.C.
Memo. 1998-89; Smith v. Commissioner, T.C. Memo. 1997-503; see
also Golanty v. Commissioner, 72 T.C. at 432. Mrs. Sullivan had
no experience with the economics of a profitable cutting horse
operation, and her consultations with experts did not include
advice regarding the financial aspects of petitioners' horse-
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