Barry S. and Yvonne C. Hillman - Page 25

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          Cf. Golanty v. Commissioner, 72 T.C. at 429; Sullivan v.                     
          Commissioner, T.C. Memo. 1998-367.  When combined with the                   
          recreational elements present for Dr. Hillman and Denise, as well            
          as petitioners’ tendency to treat personal expenses for Denise’s             
          equine instruction and the care of “nonbusiness” horses as                   
          business expenses, we believe the after-tax economics of                     
          petitioners’ show horse activity support an inference that the               
          activity was not engaged in for profit.                                      
          Personal Pleasure or Recreation                                              
               The existence of recreational elements in an activity may               
          indicate that the activity is not engaged in for profit; on the              
          other hand, where an activity lacks any appeal other than profit,            
          a profit motive may be indicated.  See sec. 1.183-2(b)(9), Income            
          Tax Regs.                                                                    
               The record supports a finding that petitioners’ recreational            
          objectives were a significant component of petitioners’ show                 
          horse activity.  Dr. Hillman has been involved with horses for 40            
          years.  Furthermore, Denise has been riding, showing, and caring             
          for horses since she was 8 years old and enjoyed riding and                  
          grooming the horses included in petitioners’ show horse activity.            
          As previously noted, most of the onerous tasks of their horses’              
          care were performed by hired help, the expenses of which were                

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