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indicate the lack of a profit objective, especially where the
losses from the activity produce a tax benefit. Id.
Petitioners reported Form W-2 income in the respective
amounts of $70,621, $84,555, and $94,697 for 1993, 1994, and
1995. Petitioners claimed net losses from the horse breeding and
NAS activities of $23,657, $31,208, and $25,162 for 1993, 1994,
and 1995, respectively. Thus, petitioners reduced their taxable
income by approximately 34 percent in 1993, 37 percent in 1994,
and 27 percent in 1995, and accordingly their tax liability was
reduced.
This factor favors respondent’s position.
(9) Elements of Personal Pleasure or Recreation.
The existence of personal pleasure or recreation relating to
the activity may indicate the absence of a profit objection.
Sec. 1.183-2(b)(9), Income Tax Regs.
While neither petitioner rides the horses purely for
pleasure, petitioners acknowledge that they both derived personal
pleasure in working with horses and horse breeding. Mrs. Reimer
trained the horses for show and derived much pleasure and pride
in seeing her hard work result in IAHA sponsored awards. She
also enjoyed being in the “inner circle” of horse breeders and
trainers with highly “political” connections.
The Court has recognized that “unquestionably, an enterprise
is no less a ‘business’ because the entrepreneur gets
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