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5. Taxpayer's Success in Other Activities
The fact that a taxpayer has previously engaged in similar
activities and made them profitable may show that the taxpayer
has a profit objective, even though the activity is presently
unprofitable. Sec. 183-2(b)(5), Income Tax Regs.
Petitioner testified that she profitably bred dogs from 1966
to 1984. However, her testimony on this point was at best vague.
She said she sold a total of about 10 to 15 puppies. Petitioners
did not report any income from this activity on their tax returns
that are in the record (1978 to 1984), and petitioners provided
no information about any income from dog breeding before 1978.
Petitioners did not show that petitioner's work at Kelly or
Winnipesocki Airlines had any bearing on her ability to conduct a
profitable horse activity.
This factor favors respondent.
6. Taxpayer's History of Income or Losses
A history of substantial losses may indicate that an
activity was not conducted for profit. Golanty v. Commissioner,
supra at 427; sec. 1.183-2(b)(6), Income Tax Regs.
Petitioner had losses from the horse activity each of the 12
years from 1979 to 1990. She had losses in those years totaling
$749,338 and income of $60,838. Losses during the initial stage
of an activity do not necessarily indicate that the activity was
not conducted for profit. Engdahl v. Commissioner, 72 T.C. at
669; sec. 1.183-2(b)(6), Income Tax Regs. Petitioners contend
that the losses occurred during the startup phase. We disagree.
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