James L. Sullivan and Dorothy B. Sullivan - Page 37

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          inference that petitioners lacked a profit motive.                          
               Petitioners cite Burrow v. Commissioner, T.C. Memo.                    
          1990-621, in support of their position, but that case is readily            
          distinguishable.  Burrow was concerned with the first 4 years of            
          losses in a horse breeding operation, not 23 years out of 26.               
          Moreover, in Burrow receipts for years 5 through 7 of the                   
          operation had increased dramatically over the first 4 years,                
          providing evidence that the initial losses would not persist.  We           
          concluded that because the losses were in the early period of the           
          activity, they were not evidence of lack of profit intent.  The             
          patent difference in petitioners' loss history distinguishes                
          Burrow.                                                                     
               For the foregoing reasons, petitioners have failed to show             
          that they entered into and continued their horse-related                    
          activities with the actual and honest objective of making a                 
          profit.  Dreicer v. Commissioner, 78 T.C. 642 (1982); Golanty v.            
          Commissioner, supra.  Likewise we believe they have failed to               
          show that their horse-related activities were engaged in with the           
          "primary" purpose of earning a profit.  Cf. Westbrook v.                    
          Commissioner, 68 F.3d 868 (5th Cir. 1995).                                  
               To reflect the foregoing,                                              
                                             Decision will be entered for             
                                        respondent.                                   







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