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(D.C. Cir. 1983). In deciding whether petitioners operated their
show horse activity for profit, we apply the following nine
nonexclusive factors: (1) The manner in which the taxpayer
carried on the activity; (2) the expertise of the taxpayer or his
or her advisers; (3) the time and effort expended by the taxpayer
in carrying on the activity; (4) the expectation that the assets
used in the activity may appreciate in value; (5) the success of
the taxpayer in carrying on other similar or dissimilar
activities; (6) the taxpayer's history of income or loss with
respect to the activity; (7) the amount of occasional profits, if
any, which are earned; (8) the financial status of the taxpayer;
and (9) whether elements of personal pleasure or recreation are
involved. See sec. 1.183-2(b), Income Tax Regs. No single
factor controls. See Osteen v. Commissioner, supra; Brannen v.
Commissioner, 722 F.2d 695, 704 (11th Cir. 1984), affg. 78 T.C.
471 (1982); sec. 1.183-2(b), Income Tax Regs. Petitioners have
the burden of proof. See Golanty v. Commissioner, 72 T.C. 411,
426 (1979), affd. without published opinion 647 F.2d 170 (9th
Cir. 1981).
Petitioners called two expert witnesses. O’Connor appraised
petitioners’ horses. James Truitt (Truitt) appraised
petitioners’ property, including their residence and farm
improvements. As discussed below, petitioners have proven that
the appreciation in their horses and farm improvements was
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