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Petitioners had at least 11 broodmares in 1983, 1984, and 1985,
and had some of their largest losses in those years.
Petitioners contend that they spent cautiously in 1995,
which shows that they had a profit objective. We are not
convinced that petitioners spent cautiously in 1995. They spent
less in 1989, 1990, 1991, and 1993 than they did in 1995. Also,
petitioners’ level of spending is inconsistent with their claimed
business plan of having 11 good-quality broodmares. To comply
with their business plan, it appears that petitioners needed to
spend more to buy more broodmares. This factor favors
respondent.
2. The Expertise of the Taxpayers or Their Advisers
Efforts to gain experience, a willingness to follow expert
advice, and preparation for an activity by extensive study of its
practices may indicate that a taxpayer has a profit motive. See
sec. 1.183-2(b)(2), Income Tax Regs.
By 1995, Mrs. Berry had learned a lot about breeding and
raising racking and Tennessee walking horses. People sought her
advice about horse breeding. However, there is no evidence that
Mrs. Berry sought or acquired expertise in the financial aspects
of horse breeding.
Petitioners contend that they consulted Carter, Roberts, and
Yeiser as experts. There is no evidence that Carter or Yeiser
advised petitioners how to make their farm and horse activity
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