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activity; (8) the financial status of the taxpayer; and (9)
elements of personal pleasure or recreation. This list is
nonexclusive, and the number of factors for or against the
taxpayer is not necessarily determinative, but rather all facts
and circumstances must be taken into account, and more weight may
be given to some factors than to others. Id.; cf. Dunn v.
Commissioner, 70 T.C. 715, 720 (1978), affd. 615 F.2d 578 (2d
Cir. 1980).
As an initial matter, respondent contends that Mr.
Rinehart’s testimony regarding the horse breeding activity was
not credible and that his “uncorroborated” testimony should be
disregarded. We disagree. Other witnesses corroborated Mr.
Rinehart’s testimony regarding the horse breeding activity. We
found Mr. Rinehart’s testimony regarding this particular issue to
be credible.21
Manner in Which the Activity Is Conducted
The fact that a taxpayer carries on the activity in a
businesslike manner and maintains complete and accurate books and
records may indicate a profit objective. Sec. 1.183-2(b)(1),
Income Tax Regs. The evidence established that Mr. Rinehart kept
complete and accurate books and records and that he operated the
horse breeding activity in a businesslike manner.
Mr. Rinehart had a business plan for the horse breeding
21 This does not mean we find Mr. Rinehart’s testimony
regarding other issues presented in this case to be credible. We
make no such finding herein.
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