Louis A. Filios and Estate of Emma L. Filios, Deceased, Louis A. Filios, Executor - Page 12

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          Of the expenses from 1957 to 1993, $479,210 was attributable to              
                                     II.  OPINION                                      
          A.   Whether Petitioner Operated His Horse Racing and Breeding               
               Activity for Profit in 1992 and 1993                                    
               The issue for decision is whether petitioner operated his               
          horse racing and breeding activity for profit in 1992 and 1993.              
               An activity is conducted for profit if it is conducted with             
          an actual and honest profit objective.  Osteen v. Commissioner,              
          62 F.3d 356, 358 (11th Cir. 1995), affg. in part and revg. on                
          other issues T.C. Memo. 1993-519; Surloff v. Commissioner, 81                
          T.C. 210, 233 (1983); Dreicer v. Commissioner, 78 T.C. 642, 645              
          (1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983).  In            
          deciding whether petitioner operated his horse racing and                    
          breeding activity for profit, we apply the nine factors listed in            
          section 1.183-2(b), Income Tax Regs.  The factors are:  (1) The              
          manner in which the taxpayer carried on the activity; (2) the                
          expertise of the taxpayer or his or her advisers; (3) the time               
          and effort expended by the taxpayer in carrying on the activity;             
          (4) the expectation that the assets used in the activity may                 
          appreciate in value; (5) the success of the taxpayer in carrying             
          on other similar or dissimilar activities; (6) the taxpayer's                
          history of income or loss 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) whether elements of                
          personal pleasure or recreation are involved.  No single factor              
          controls.  Osteen v. Commissioner, supra; Brannen v.                         

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