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(5) The Success of The Taxpayer in Carrying on Other
Similar or Dissimilar Activities.
The fact that a taxpayer has engaged in similar activities
in the past and converted them from unprofitable to profitable
enterprises may indicate that he is engaged in the present
activity for profit, even though the activity is presently
unprofitable. Sec. 1.183-2(b)(5), Income Tax Regs.
Mr. Reimer is a well-educated and smart businessman. Upon
entering the automobile sales industry, he advanced quickly from
a salesperson to a financial manager. He also used his skills to
participate in the administration of various horse breeding
shows, including writing scripts for the shows. However, despite
his ability to make contacts with others in the horse breeding
industry, petitioners have consistently failed to make this
activity profitable. Mr. Reimer’s efforts in the water and air
filtration activity also failed to be profitable.
Even with Mr. Reimer’s business experience and ability, we
do not find that he applied such experience to their horse
breeding activity to make it profitable.
This factor favors respondent’s position.
(6) The Taxpayer’s History of Income or Losses With Respect
to The Activity.
A history of income, losses, and occasional profits from an
activity may indicate a profit objective. Allen v. Commissioner,
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