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horses. Indeed, from 1986 until May 1999, petitioner has lost
only two foals. During the same period of time, petitioner lost
only two mares, both from natural causes, with one dying of old
age.
We are not convinced that petitioner incurred losses during
the years in issue due to a depressed market or unforeseen
problems. The losses petitioner incurred during the years in
issue were consistent with his losses for all the years from 1986
through 1997.
(7) The Amount of Occasional Profits, if Any, Which Are Earned
Petitioner’s activity has never been profitable. Petitioner
admitted at trial that he will never be able to recoup what he
has spent thus far.18
Petitioner asserts that he has sold several Arabians for
substantial sums over the past several years. However, the
occasional gain petitioner received from the sale of horses from
1986 through 1997 was de minimis compared to the expenses
incurred, and as previously observed, petitioner’s occasional
opportunity to earn profits from the sale of horses was
diminished by the extraordinary commissions paid to Mr. Dahart.
18Petitioner attempted to mitigate the significance of this
statement by asserting that he could more than recoup all his
losses if he sold all the livestock, equipment, and the farm.
But the farm includes petitioner’s personal residence, and
petitioner has never intended to sell the farm. He testified
that his goal is to spend less time in medicine and more time on
his farm and that he intended to retire on the property.
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