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amateur, although she acknowledged that participation as a
professional would enhance her financial success in the business.
Petitioner never attempted to qualify as a professional.
Petitioner's sole motivation for engaging in her activity
was her love for horses, dating back to her childhood.
Petitioner had no educational training or experience in the
business of breeding and training horses. She made no studies or
consultations with professionals with respect to the business
aspect of such an activity. She did not maintain a separate bank
account for her activity, and she did not maintain formal books
and records, nor does the record establish that petitioner made
any effort to change the direction of her operation, although she
recognized her need to do so.
Section 183(a) provides generally that, if an activity is
not engaged in for profit, no deduction attributable to such
activity shall be allowed. Section 183(c) defines an activity
not engaged in for profit as "any activity other than one with
respect to which deductions are allowable for the taxable year
under section 162 or under paragraph (1) or (2) of section 212."
The standard for determining whether the expenses of an activity
are deductible under either section 162 or section 212(1) or (2)
is whether the taxpayer engaged in the activity with the "'actual
and honest objective of making a profit'". Ronnen v.
Commissioner, 90 T.C. 74, 91 (1988) (quoting Beck v.
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