Harvey J. Davis and Patricia A. Davis - Page 28

                                       - 28 -                                         
          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                       

Page:  Previous  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  Next

Last modified: May 25, 2011