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regimen was successful at increasing the value of the horses).
As in Dodge, it appears that petitioners retained what they
thought were the minimum records necessary to prepare their tax
returns. Petitioner’s bookkeeping practices were more consistent
with the Schedule F activity's being a hobby than a profit-
motivated business.
Petitioner lacked a written plan. A business plan does not
have to be a financial plan or a written budget; it may be
evidenced by a taxpayer's actions. See Phillips v. Commissioner,
T.C. Memo. 1997-128. Petitioner’s intent was to buy quarter
horses, train them to be cutting horses, show them, establish
their reputation, and sell them. Petitioner acted in accordance
with that intent, but that does not establish that he was engaged
in a business for which he had a plan for success (i.e.,
profitability). Given the substantial, but expected, costs
associated with the Schedule F activity, we need more than
petitioner’s representation that he could make money if he sold
enough horses at high enough prices to conclude that petitioner
had a plan to make a profit. See Ballard v. Commissioner, T.C.
Memo. 1996-68 (taxpayer testified as to his business plan, yet
did not conduct activity in businesslike manner).
Prior to and during the years in issue, petitioner did not
advertise the Arkansas ranch or his horses in trade magazines or
publications. While we recognize that horse shows may be one
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