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profit motivation may be indicated where an activity
lacks any appeal other than profit. [Sec. 1.183-
2(b)(9), Income Tax Regs.]
In the case of a ranching endeavor such as petitioner’s, however,
this consideration does not weigh strongly either for or against
intent to profit. Aspects of potential enjoyment coexist with
aspects of demanding labor. As observed by the Court in Barter
v. Commissioner, T.C. Memo. 1991-124, affd. without published
opinion 980 F.2d 736 (9th Cir. 1992): “While we agree with
petitioner fixing fences and dragging roads is not in and of
itself pleasurable, petitioner did glean some pleasure from the
ranch * * * and petitioner received the personal gain of building
and maintaining what was to be his retirement home.” Similarly,
petitioner here engaged in toilsome work such as ripping soil for
planting, but he also testified that he embarked upon cattle
ranching in part because he desired to slow down his lifestyle.
Hence, despite the presence of difficult tasks, a personal motive
was an instigator for the venture. As a result, this factor does
little to either advance or detract from petitioner’s position.
In summary, the circumstances of these cases, when
considered within the framework of the nine factors above,
indicate that petitioner did not possess the requisite intent to
profit from his cattle-ranching operations. Petitioners
therefore are subject to the restrictions set forth in section
183 and improperly deducted losses.
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