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Although a reasonable expectation of profit on taxpayer's part is
not required, the profit objective must be bona fide, as
determined from a consideration of the surrounding facts and
circumstances. Keanini v. Commissioner, supra at 46; Dreicer v.
Commissioner, supra at 645; Golanty v. Commissioner, 72 T.C. 411,
426 (1979), affd. without published opinion 647 F.2d 170 (9th
Cir. 1981); Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965),
affd. 379 F.2d 252 (2d Cir. 1967).
Whether petitioner engaged in her dog breeding activity with
an actual and honest objective of realizing a profit must be
redetermined year-to-year, taking into account all of the
relevant facts and circumstances. Golanty v. Commissioner, supra
at 426; sec. 1.183-2(a) and (b), Income Tax Regs. More weight is
given to objective facts than to petitioner's statement of her
intent. Engdahl v. Commissioner, 72 T.C. 659, 666 (1979); sec.
1.183-2(a), Income Tax Regs. Respondent's determinations with
respect to other years, if any, may be taken into account but are
not conclusive.
The following factors, which are nonexclusive, should be
considered in the determination of whether an activity is engaged
in for profit: (1) The manner in which the taxpayer carried on
the activity; (2) the expertise of the taxpayer or his or her
advisers; (3) the time and effort expended by the taxpayer in
carrying on the activity; (4) the expectation that assets used in
the activity may appreciate in value; (5) the success of the
taxpayer in carrying on other similar or dissimilar activities;
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