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Each party cited events that occurred after 1996. We do not
consider those events (other than those related to trial
preparation) because those events do not show whether petitioners
had a profit objective during the years in issue. See Lundquist
v. Commissioner, T.C. Memo. 1999-83 n.1, affd. without published
opinion 211 F.3d 600 (11th Cir. 2000); Estate of Brockenbrough v.
Commissioner, T.C. Memo. 1998-454; Gustafson's Dairy, Inc. v.
Commissioner, T.C. Memo. 1997-519; Choate Constr. Co. v.
Commissioner, T.C. Memo. 1997-495; cf. Estate of Hutchinson v.
Commissioner, T.C. Memo. 1984-55 (events occurring after the date
in issue are relevant only if they shed light on the taxpayer's
state of mind on the date in issue), affd. 765 F.2d 665 (7th Cir.
1985).
B. Applying the Factors
1. Manner in Which the Taxpayer Conducts the Activity
Maintaining complete and accurate books and records,
conducting the activity in a manner substantially like comparable
businesses which are profitable, and making changes in operations
to improve profitability suggest that a taxpayer conducted an
activity for profit. See Engdahl v. Commissioner, 72 T.C. 659,
666-667 (1979); sec. 1.183-2(b)(1), Income Tax Regs.
a. Books and Records, Bank Accounts, and Business
Plan
Respondent contends that petitioners’ books and records were
not adequate because they did not keep them for each horse.
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