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detail, keeping only the minimum records necessary to prepare tax
returns, was considered by the Court to be an indication that the
activity was not carried on for profit. See id.
Moreover, even in Golanty v. Commissioner, 72 T.C. at 430,
where the taxpayer kept a separate ledger on a monthly basis for
her horse-breeding enterprise, the Court stated that “there has
been no showing that books and records were kept for the purpose
of cutting expenses, increasing profits, and evaluating the
overall performance of the operation.” The Court labeled these
records merely “the trappings of a business” because the taxpayer
“failed to show that she used them to improve the operation of
the enterprise.” Id.
Petitioner here, like the taxpayers in Burger, Dodge, and
Golanty, appears to have kept the minimum records necessary to
prepare his tax returns. As indicated above, simply maintaining
lists or files of expenses and receipts, without any further cost
accounting or analysis, carries little weight in establishing a
profit objective.
Second, as regards similarity with comparable businesses,
neither petitioner nor respondent has offered any evidence as to
how profitable cattle ranches are run. However, it seems
unlikely that entrepreneurs seriously intending to profit from a
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