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taxpayer in carrying on the activity; (4) the expectation that
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 losses 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 exist.
No single factor is necessarily relevant or dispositive; rather,
the facts and circumstances of the case ultimately control. See
Keanini v. Commissioner, 94 T.C. 41, 47 (1990). Further, the
determination of a taxpayer’s profit motive is made on a yearly
basis. See Commissioner v. Sunnen, 333 U.S. 591, 598 (1948).
We now apply each of these factors to the facts in this case.3
1. Manner of Carrying on the Activity
The fact that a taxpayer carries on an activity in a
businesslike manner and maintains complete and accurate books and
records may indicate that the activity was engaged in for profit.
See Engdahl v. Commissioner, 72 T.C. 659, 666 (1979); sec. 1.183-
2(b)(1), Income Tax Regs. Adapting new techniques and abandoning
methods that are economically inefficient may also support the
3 The record does not reveal whether petitioners ever
engaged in other similar or dissimilar activities. Thus, we find
a discussion of petitioners’ success in these activities to be
nongermane.
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