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claims. Petitioner’s testimony was generally vague and focused
on the nature of the Arizona thoroughbred industry, rather than
on the manner in which he conducted the breeding and racing
operations. Petitioner alluded to one instance in which he
consulted a nutritionist to eliminate a condition called
epiphycytis. Petitioner’s testimony was uncorroborated by
witnesses or documents.
The evidence presented at trial does not persuade us that
petitioner maintained records for the purpose of “cutting
expenses, increasing profits, and evaluating the overall
performance of the operation”. Golanty v. Commissioner, supra at
430; see also Sullivan v. Commissioner, T.C. Memo. 1998-367
(generally no profit motive where lack of evidence that taxpayer
used records to improve losing venture), affd. without published
opinion 202 F.3d 264 (5th Cir. 1999). Petitioner testified that
“all the records in the world, or business plans in the world are
not going to make a difference on whether you make a profit in
this”. A businesslike operation, however, would include analyses
on why large losses recurred over a long period and whether any
possibility of recouping them existed.
A taxpayer’s history of income or loss with respect to an
activity may indicate the presence or absence of a profit
objective. Golanty v. Commissioner, 72 T.C. at 426. The
magnitude of the activity’s losses in comparison with its
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