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activity from 1955 to 1993, and that his use of these different
approaches shows that petitioner had a profit motive. Landry
testified that petitioner: (a) Emphasized vitamins and minerals
without regard to bloodlines and racing success; (b) increased
the number of horses; (c) used improved bloodlines with unproven
racing success; and (d) used improved bloodlines with proven
racing success.
The use of vitamins was not a change in how petitioner
operated. Petitioner adhered to that idea from 1955 through the
years in issue. Petitioner increased the size of his herd from
1955 to 1975, but that was not a change in how he operated.
Around 1976, petitioner began to breed his horses to
stallions which had improved bloodlines and unproven racing
records. Petitioner continued to use stallions with improved
bloodlines and unproven racing records through the years in
issue. Petitioners contend that in 1990 or 1993 petitioner
changed his methods by breeding his horses to horses with
excellent pedigrees and proven racing records. Petitioners also
contend that the facts that petitioner occasionally changed
trainers and breeders, that he decided which horses to buy, and
that he gave away horses to cut costs, show that he intended to
make a profit.
We disagree. Petitioner's method of operations generally
continued unchanged for more than 30 years. Petitioner never
sought advice on how to make his horse activity profitable, and
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