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factor analysis in those situations where it is helpful to do so.
See, e.g., Phillips v. Commissioner, T.C. Memo. 1997-128. In
this case, we consider the burden of discussing each of the above
factors to outweigh the benefits of doing so. No one factor is
determinative, see sec. 1.183-2(b), Income Tax Regs., some
factors are not applicable, and those that are provide little
guidance when considered separately. For example, respondent’s
position is strongly supported by the history of annual losses
suffered by petitioners since they began their horse racing
activity. A consistent pattern of losses suggests the lack of a
profit motive. See Golanty v. Commissioner, supra; sec. 1.183-
2(b)(6), Income Tax Regs. On the other hand, given the nature of
the activity involved, it is not improbable that petitioners’
cumulative loss could be recouped on the back of a single
successful foal. Many of the foals sired by Two Punch (the
stallion to which one of petitioners’ broodmares was mated)
successfully competed as thoroughbreds. As noted in the
applicable regulation, “an opportunity to earn a substantial
ultimate profit in a highly speculative venture is ordinarily
sufficient to indicate that the activity is engaged in for profit
even though losses or only occasional small profits are actually
generated.” Sec. 1.183-2(b)(7), Income Tax Regs. We consider
petitioners’ horse racing activity to be a highly speculative
venture.
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