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Crossings”. Petitioner used separate letterhead and business
cards for the horse activity that bore the name “Arabian
Crossings”. Mr. Dahart’s name appears on both the letterhead and
business cards along with petitioner’s name. Mr. Dahart did not
own any interest in petitioner’s horses.
Petitioner has not prepared a written business plan for his
horse activity, nor has he prepared a written analysis to
determine how he could make a profit or what he would have to do
to break even. Petitioner has not consulted with persons with
expertise regarding the financial aspects of his horse activity.
OPINION
The sole issue for decision is whether petitioner’s
breeding, training, and showing of Arabian horses activity is an
activity not engaged in for profit. Section 183(a) provides that
if a taxpayer’s activity constitutes an activity not engaged in
for profit, expenses arising out of the activity are allowed as
deductions only as provided in section 183(b). An “activity not
engaged in for profit” is defined in section 183(c) as “any
activity other than one with respect to which deductions are
allowable for the taxable year under section 162 or under
paragraph (1) or (2) of section 212.” Section 162 generally
permits the deduction of expenses incurred in a trade or
business, and paragraphs (1) and (2) of section 212 generally
permit a similar deduction for expenses incurred “for the
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Last modified: May 25, 2011