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dispositive; rather, the facts and circumstances of the case
ultimately control. See Keanini v. Commissioner, 94 T.C. 41, 47
(1990).
We now apply each of these factors to the facts in this case.
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
conclusion that the taxpayer possessed the requisite profit motive.
See Allen v. Commissioner, 72 T.C. 28, 35 (1979).
Here, the record is replete with instances where petitioners
did not conduct their cattle-raising and deer operations in a
businesslike manner. Petitioners had no formal business plan,
budgets, or accounting records. Petitioners’ records and expense
ledgers consisted primarily of canceled checks, invoices, and Forms
1099. These records were often inaccurate and incomplete. For
instance, petitioner often “forgot to put a couple thousand dollars
worth of cattle in his balance sheets”. Moreover, petitioners were
unable to allocate specific costs between their two ranches because
of their practice of aggregating expenses from both ranches.
Petitioners also failed to keep separate bank accounts; they
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