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profit motive. See Sullivan v. Commissioner, T.C. Memo. 1998-367
(generally no profit motive where lack of evidence that taxpayer
used records to improve losing venture), affd. without published
opinion 202 F.3d 264 (5th Cir. 1999).
Petitioners also failed to prepare any financial
statements, profit and loss projections, budgets, breakeven
analyses, or marketing surveys, all of which can be significant
financial tools to aid in “cutting expenses, increasing profits,
and evaluating the overall performance of the operation.”
Golanty v. Commissioner, supra at 430. We conclude that
petitioners’ maintenance of books and records was simply to
memorialize for tax purposes the various expenses associated with
the activity. That petitioners were able to substantiate their
claimed expenses simply does not prove that their books and
records were kept or used in a businesslike manner.
b. Petitioners’ Involvement in Other Profitable
Enterprises
There is no evidence in the record that shows how
petitioners operated or participated in other profitable
enterprises, such as Mr. McKeever’s employer, Aero Industrial
Alloy. Thus, we are unable to consider whether the horse
activity was operated in a similar manner. See sec. 1.183-2(b),
Income Tax Regs.
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