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Of the expenses from 1957 to 1993, $479,210 was attributable to
depreciation.
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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