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into her horse activity. This factor is neutral as to whether
petitioner had the requisite profit objective in conducting her
horse activity.
6. The taxpayer’s history of income or losses with
respect to the activity.
Petitioner’s horse activity did not generate a profit during
any of the years from the inception of her horse activity through
the year in issue. We have previously held that the startup
phase of an American saddlebred horse breeding activity is 5 to
10 years. Engdahl v. Commissioner, 72 T.C. 659, 669 (1979). The
year in issue falls within this startup phase. Petitioner
reported increasing losses from 1989 to 1995. During that
period, 1993 was the only year in which petitioner’s losses
declined from the previous year. This decline was the result of
petitioner’s earning pasturing income of $9,774 and horse show
income of $627.50. Without the pasturing income, petitioner’s
losses would have increased in 1993 from the previous year, as
was the general pattern for petitioner’s horse activity. From
1989 to 1995, petitioner reported losses in excess of $100,000.
In spite of these losses, petitioner never considered abandoning
the activity. Petitioner has not demonstrated that future horse
activity income will be sufficient to generate an overall profit
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