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Petitioners contend that petitioner's books were like those
kept by the taxpayer in Phillips v. Commissioner, T.C. Memo.
1997-128, whom we held conducted a horse activity for profit. We
disagree. In Phillips, the taxpayers had a business plan. They
calculated the costs per horse per month. They estimated when
their horse activity would become profitable. They performed a
detailed analysis of their horse activity and planned each of
their horses' breedings. Petitioner did not do so. Phillips
also differs from this case because the taxpayers in Phillips
made significant changes in their operating methods by adding
horse boarding, training, teaching classes, and operating a tack
shop to sell equipment.
d. Commingling of Funds
Commingling of funds suggests that the activity is a hobby
rather than a business for profit. See Rinehart v. Commissioner,
T.C. Memo. 1998-205; Ballich v. Commissioner, T.C. Memo. 1978-
497. Petitioner paid the expenses of the horse breeding activity
from petitioners' personal account. She had no separate bank
accounts for the horse breeding activity.
Petitioners used a credit card for her horse activity.
However, she did not say that she paid all of the horse activity
expenses with the credit card, and she paid the credit card bills
from petitioners' personal checking account. She did not
segregate income from her horse activity.
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