- 9 -
realize a profit on the entire operation which presupposes not
only future net earnings but also sufficient net earnings to
recoup the losses which have meanwhile been sustained in the
intervening years"), affd. 379 F.2d 252 (2d Cir. 1967).
Respondent, therefore, is sustained on this issue.
Having concluded that petitioner's horse breeding activity
was not engaged in for profit, the Court finds it unnecessary to
consider respondent's alternative determination that some of the
expenses claimed in connection with the activity were not
substantiated.
With respect to the third issue, petitioner and her father
began an emu breeding business in 1993.2 Although the record is
not clear, it appears that this activity was also conducted on
the same property with petitioner's horse breeding activity.
The only issue with respect to the emu activity is
petitioner's claim to a depreciation deduction of $1,036 on her
1993 Federal income tax return with respect to four emus that
were purchased in September 1993.3 The four emus (two matched
2 An emu is defined as any of various flightless birds,
including a swift-running Australian bird with underdeveloped
wings that is related to and smaller than the ostrich. See
Webster's Ninth New Collegiate Dictionary 408 (1985).
3 Petitioner reported the emu activity on a separate
Schedule C of her 1993 and 1994 income tax returns. Respondent
did not challenge the activity as an activity not engaged in for
profit under sec. 183.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011