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Inc. v. Commissioner, 94 T.C. 685, 689 (1990). The fact that the
Commissioner eventually loses or concedes a case is not
determinative of whether a taxpayer is entitled to reasonable
litigation and administrative costs. See Sokol v. Commissioner,
92 T.C. 760, 767 (1989).
Judicial Proceeding
We now consider whether respondent's position in the
judicial proceeding was substantially justified. The sole issue
involved in the judicial proceeding was whether petitioners
engaged in their horse breeding and horse racing activities for
profit within the meaning of section 183. Respondent's position
in the judicial proceeding was that petitioners did not engage in
their horse breeding and horse racing activities with the primary
purpose of making a profit.
Whether a taxpayer is engaged in an activity with the
requisite profit objective is determined from all the facts and
circumstances. E.g., Hulter v. Commissioner, 91 T.C. 371, 393
(1988); Taube v. Commissioner, 88 T.C. 464, 480 (1987); Golanty
v. Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981); sec. 1.183-2(a) and (b),
Income Tax Regs. More weight is given to objective facts than to
the taxpayer's mere statement of his or her intent. E.g.,
Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd. without
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