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Finally, we do not accept petitioners’ argument that Dr.
Harrington did not receive pleasure from the activity. To be
sure, caring for horses is hard work. But Dr. Harrington clearly
loves the animals and derives much pleasure and pride from them.
Petitioners also appear to enjoy being in the circle of other
Appaloosa horse breeders. We cannot discount the pleasure that
Dr. Harrington derived from the horse-breeding activity merely
because some of the daily chores are labor-intensive. Indeed,
these labor-intensive chores provided what must have been a
welcome break from Dr. Harrington’s regular activities as a
college professor.
The second factor is the expertise of Dr. Harrington and his
advisers. Preparation for an activity by extensive study of its
accepted business, economic, and scientific practices may
indicate a profit motive. Sec. 1.183-2(b)(2), Income Tax Regs.
The focus is on learning applicable to generating an overall
profit from the activity. See Golanty v. Commissioner, supra at
427.
Petitioners offered no evidence to show that Dr.
Harrington’s new skills were helpful in making their horse-
breeding business profitable. Dr. Harrington may have improved,
extended, and refined his skills in caring for horses, but
petitioners failed to explain how his new and improved skills
would lead to a profitable horse-breeding business.
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