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Section 1.183-2(b), Income Tax Regs., sets forth a
nonexclusive list of factors to be considered in determining
whether the taxpayer has the requisite profit objective. The
factors are: (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, that are
earned; (8) the financial status of the taxpayer; and
(9) elements of personal pleasure or recreation.
These factors are not intended to be exclusive, and no one
factor or majority of the factors need be considered
determinative. Golanty v. Commissioner, supra at 426-427;
sec. 1.183-2(b), Income Tax Regs. The most significant factors
in this case are the manner in which petitioner carried on his
thoroughbred horse breeding and racing activity, the history of
income and loss, the absence of occasional--or any--profits, and
the financial status of the taxpayer.
Petitioners argue that they conducted their thoroughbred
breeding and racing operation in a businesslike manner.
Maintaining complete and accurate books and records, conducting
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