Barry S. and Yvonne C. Hillman - Page 19

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          Golanty v. Commissioner, 72 T.C. at 432.  A taxpayer’s failure to            
          obtain expertise in the economics of horse-related activities                
          indicates a lack of profit motive.  See Burger v. Commissioner,              
          supra at 359.  In this case, petitioners sought no professional              
          advice on the economic aspects of the breeding and showing of                
          horses.  Dr. Hillman’s discussions with his accountant focused on            
          the tax aspects of petitioners’ show horse activity.                         
          Time and Effort Expended                                                     
               The fact that the taxpayer devotes much of his or her                   
          personal time and effort to carrying on an activity, particularly            
          if the activity does not have substantial recreational aspects,              
          may indicate a profit motive.  See sec. 1.183-2(b)(3), Income Tax            
          Regs.  Dr. Hillman testified that he spent “something over 500               
          hours” attending horse shows in 1993, and that the bookkeeping               
          tasks associated with the show horse activity took approximately             
          2 to 3 hours per month.  Dr. Hillman’s testimony regarding time              
          spent at horse shows is self-serving, uncorroborated, and not                
          credible.  The parties have stipulated that none of petitioners’             
          horses participated in horse shows in 1993.  Even putting aside              
          this inconsistency, Dr. Hillman’s estimate of “over 500 hours”               
          appears scripted to meet respondent’s alternative argument that              
          the show horse activity was a section 469 “passive activity”,                

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