- 11 - A. With the prior years and losses? Q. Yeah. A. I would have no idea off the top of my head. * * * Q. During 1989 and subsequent years for the business, did you keep any records that would show the expenditures made with respect to any individual dog? A. No, sir. Q. Okay. Did you make any attempt, since 1989 and subsequent years, to apportion the expenses to determine how much each animal was costing you? A. No, sir. Since 1989 only five of petitioner's dogs generated any income, although she owned 28 dogs during 1993, and deducted the costs of maintaining all of those dogs. Petitioner has an obvious interest in owning, raising, and showing Pomeranian dogs; however, we find that during the year in issue, her interest, which developed when she was a child, was personal in nature and not based upon the necessary profit motive that would allow for the activity to be considered a trade or business within the meaning of section 162(a). Of course, deriving personal satisfaction out of an activity does not necessarily indicate the absence of an intent to profit; however, "where the possibility for profit is small (given all the other factors) and the possibility for gratification is substantial, it is clear that the latter possibility constitutes the primary motivation for the activity." Smith v. Commissioner, T.C. Memo. 1997-503 (citingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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