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not have engaged in the activity for profit. See sec. 1.183-
2(a), Income Tax Regs.
Petitioner is a wealthy, successful businessman. Petitioner
testified that he and his wife had long planned that he would
leave Wal-Mart when he was 45 years old. Petitioner began
working for Wal-Mart when he was in college and retired after
25 years, in 1995, when, we assume, he was approximately 45 years
old. In 1985, petitioner acquired an interest in the Arkansas
ranch. In 1987, petitioner began what we have characterized as
the Schedule F activity. In 1996, following his retirement from
Wal-Mart, petitioner moved to Texas and formed a limited
liability company to engage in the business of horse breeding and
training. The Texas ranch was substantially bigger than the
Arkansas ranch. We believe that during the years in issue
petitioner undertook and carried on the Schedule F activity
primarily as a hobby. We reach that conclusion taking into
account petitioner’s statement of his intent but giving greater
weight to the factors set forth in the regulations, in light of
the facts before us. Most prominently, the Schedule F activity
failed to generate even occasional profits, a factor to be taken
account of under section 1.183-2(b)(7), Income Tax Regs., which
failure did not seem paramount to petitioner, a wealthy
businessman, another factor to be taken into account, under
section 1.183-2(b)(8), Income Tax Regs. In the following
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