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Commissioner, 722 F.2d 695, 704 (11th Cir. 1984), affg. 78 T.C.
471 (1982); sec. 1.183-2(b), Income Tax Regs. Petitioners have
the burden of proof on this issue. Golanty v. Commissioner, 72
T.C. 411, 426 (1979), affd. without published opinion 647 F.2d
170 (9th Cir. 1981).
B. Application of the Factors
1. Manner in Which the Taxpayer Conducts the Activity
Maintaining complete and accurate books and records,
conducting the activity in a manner substantially similar to
comparable businesses which are profitable, and making changes in
operations to adopt new techniques or abandon unprofitable
methods are factors which may indicate that a taxpayer conducted
the activity for profit. Engdahl v. Commissioner, 72 T.C. 659,
666-667 (1979); sec. 1.183-2(b)(1), Income Tax Regs.
Harry L. Landry (Landry), petitioners' expert, testified
that petitioner's recordkeeping was better than what he usually
saw for horse activities. Petitioners contend that petitioner
operated his horse racing and breeding activity in a businesslike
manner because he had a separate bank account and kept detailed
financial and breeding records for the activity. We disagree.
Petitioner did not have budgets, income statements, balance
sheets, income projections, or financial statements for the
activity other than those compiled annually by petitioners'
accountant to prepare their annual Federal tax returns.
Petitioners contend that petitioner tried four different
approaches to succeeding at his horse racing and breeding
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