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669. As Mr. Rinehart's losses were sustained during the startup
phase of the horse breeding activity, we conclude that the losses
sustained are not an indication that the horse breeding activity
was not engaged in for profit.
Elements of Personal Pleasure
The absence of personal pleasure or recreation relating to
the activity in question may indicate the presence of a profit
objective. Sec. 1.183-2(b)(9), Income Tax Regs. The mere fact
that a taxpayer derives personal pleasure from a particular
activity does not, per se, demonstrate a lack of profit motive.
During the years in issue, the Campbell ranch was not used
for recreational or social entertaining. Petitioners did not
ride the horses they owned for pleasure. The “pleasure” Mr.
Rinehart derived from his involvement in the horse breeding
activity was not the enjoyment associated with recreation; it was
the satisfaction associated with a job or occupation.
Additionally, many of the duties performed by petitioner were not
activities that provided personal pleasure or recreation.
Accordingly, this factor does not weigh against petitioners.
Conclusion
We note that Mr. Rinehart previously litigated in this Court
whether the horse breeding activity was an activity not engaged
in for profit for the years 1992 and 1993. Rinehart v.
Commissioner, T.C. Memo. 1998-205 (Rinehart I). Each taxable
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