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be to realize a profit on the entire operation, which presupposes
not only future net earnings but also sufficient net earnings to
recoup the losses that have meanwhile been incurred in the
intervening years. Bessenyey v. Commissioner, 45 T.C. 261, 274
(1965), affd. 379 F.2d 252 (2d Cir. 1967). We find it
significant that although petitioners' trees have been bearing
enough fruit to sell to the public since the mid-1980's, at no
time during petitioners' involvement in the apple orchard
activity did they realize a profit. Given the record of losses
over the 3 years at issue, we see no possibility that petitioners
ever intended to be able to recoup their substantial
expenditures. Accordingly, we find these factors weigh against
petitioners.
Substantial income from sources other than the activity in
question may also be an indication of the lack of a profit
objective especially where losses from the questioned activity
produce substantial tax benefits. Sec. 1.183-2(b)(8), Income Tax
Regs. Petitioner quite successfully carried on a part-time
dentistry practice earning more than $193,000 during the years at
issue. With such an income, petitioners could well afford a
hobby farm, particularly when it is partially financed through
the tax benefit derived from taking the losses.
Finally, the presence of personal motives in carrying on of
an activity may indicate that the activity is not engaged in for
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