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competition and that this weighs against finding that he engaged
in the horse activity for profit.
We disagree. Petitioners and their family did not ride
their horses for pleasure. Petitioner does not enjoy all the
driving required to participate in horse shows or to go to
McDannald’s to train petitioners’ horses. Petitioners showed
their horses at horse shows as their primary method of
advertising. There is a high correlation between success in
horse shows and success in the marketplace. See Appley v.
Commissioner, T.C. Memo. 1979-433; cf. Engdahl v. Commissioner,
supra at 667; Golanty v. Commissioner, supra at 431 (taxpayers’
failure to show horses indicated that taxpayers were not engaged
in activity with a profit objective). Petitioners do not deny
that they enjoyed many aspects of the horse activity. The fact
that petitioners enjoyed the horse show competitions does not
mean that they did not conduct their horse activity for profit.
See Harvey v. Commissioner, T.C. Memo. 1988-13.
This factor favors petitioners.
10. Conclusion
Considering petitioner’s testimony as corroborated by the
record as a whole, particularly the time and effort petitioners
spent on the activity, petitioners’ reasonable expectation of
profit from appreciation of the assets used in the activity,
petitioner's business plan, and the startup nature of
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