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landlord had slated the farm for subdivision before it was rented
to petitioners. In addition, the claim that their paying
boarders each assumed the responsibility of feeding, cleaning,
grooming, and providing medical services to their own horses
undercuts the notion that petitioners were experienced
equestrians involved in boarding horses for profit, or that they
expected their receipts to ever exceed the rental expense of the
farm plus supplies and other expenses. From Mr. Hudnall's
testimony, it seems that petitioners had abandoned any hope of
"making it financially" by August 1993, well before the end of
the taxable year.
The absence of any business documentation whatsoever is
indicative that the activity was not engaged in for profit.
While a taxpayer need not maintain a sophisticated cost
accounting system, the taxpayer should keep records that enable
the taxpayer to make informed business decisions. See Burger v.
Commissioner, 809 F.2d 355, 359 (7th Cir. 1987), affg. T.C. Memo.
1985-523. Petitioners provided no agreements, receipts, or any
other verification of the existence of clients. They presented
no business plan, canceled checks, business bank account, profit
projection, consultants, or record of consultations. Petitioners
state that any and all of these items, if they existed, were
simply "lost", save for a collection notice naming Victoria
Stables as a debtor to Baltimore Gas & Electric. Petitioners
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