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Section 1.183-2(b), Income Tax Regs., provides a list of
factors to be considered in the evaluation of a taxpayer's profit
objective: (1) The manner in which the taxpayer carries on the
activity; (2) the expertise of the taxpayer or his advisers; (3)
the time and effort expended by the taxpayer in carrying on the
activity; (4) the expectation that assets used in the activity
may appreciate in value; (5) the success of the taxpayer in
carrying on other similar or dissimilar activities; (6) the
taxpayer's history of income or loss with respect to the
activity; (7) the amount of occasional profits, if any, from the
activity; (8) the financial status of the taxpayer; and (9)
elements of personal pleasure or recreation. This list is
nonexclusive, and the number of factors for or against the
taxpayer is not necessarily determinative but rather all facts
and circumstances must be taken into account, and more weight may
be given to some factors than to others. See sec. 1.183-2(b),
Income Tax Regs.; cf. Dunn v. Commissioner, 70 T.C. 715, 720
(1978), affd. 615 F.2d 578 (2d Cir. 1980).
The evidence submitted to the Court establishes that
petitioners’ primary, predominant, or principal motive for
engaging in the horse activity was not for profit.
5(...continued)
Petitioners do not contend that their examination began after
July 22, 1998, or that sec. 7491 is applicable to their case.
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