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operation was closed because the shopping mall in which the
operation was located was displaced by a new freeway and because
Mr. McKeever began suffering health impacts from the refinishing
chemicals. The record as a whole does not support petitioners’
contention that these ventures were closed because of their poor
operating results.
In making our decision regarding petitioners’ intent, we
must give greater weight to the objective facts than to any mere
statement of intent. See sec. 1.183-2(a), Income Tax Regs. The
objective facts gleaned from petitioners’ mixed results in their
entrepreneurial ventures do not indicate a profit motive.
This factor, on balance, favors respondent’s position.
6. Petitioners’ History of Income or Loss
A taxpayer’s history of income, losses, and occasional
profits with respect to any activity may indicate the presence or
absence of a profit objective. See Golanty v. Commissioner, 72
T.C. at 426; sec. 1.183-2(b)(6), Income Tax Regs. A horse racing
and breeding activity may be engaged in for profit despite
consistent losses during the initial startup phase. See Golanty
v. Commissioner, supra at 427. We previously have found that the
startup phase for an activity involving horses may be between 5
and 10 years. See Engdahl v. Commissioner, 72 T.C. at 669;
Phillips v. Commissioner, T.C. Memo. 1997-128. Losses sustained
beyond the period normally required to generate profits may
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