- 6 -
petitioners’ deductions because petitioners engaged in their
horse breeding activity to make a profit.
A. Businesslike Manner
Petitioners invested significantly in advertising and
promotions, attended expositions, used professional trainers,
purchased insurance, and kept records in the same manner Mr.
Routon has for his successful business ventures. Further, they
abandoned unprofitable methods in a manner consistent with an
intent to improve profitability. See sec. 1.183-2(b)(1), Income
Tax Regs.
B. Expertise
Mr. Routon consulted extensively with Arabian horse industry
experts. He also had previous experience with farming and
animals before establishing Ascension and has since immersed
himself in the Arabian horse industry. In addition, Mr. Routon
has significant business experience from his other ventures.
C. Time Devoted to the Activity
Respondent does not contest the fact that petitioners
handled virtually all material aspects of Ascension. In addition
to their full-time engagements, petitioners devoted substantial
time and energy caring for and maintaining Ascension’s horses.
D. Expectation That Assets May Appreciate
Assets related to Ascension have appreciated and, in
accordance with petitioners’ plan, may further appreciate.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011