Michael G. Bunney - Page 15

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          be achieved.  See Bessenyey v. Commissioner, 45 T.C. 261, 274               
          (1965), affd. 379 F.2d 252 (2d Cir. 1967).                                  
               From 1992 until 2000, M&S had cumulative losses totaling               
          $601,183.  Petitioner claims that it takes time to reach a                  
          profitable level in a horse breeding business and that M&S was              
          still in the startup phase.  Petitioner has not, however,                   
          provided any evidence or plan that he could ever recoup his prior           
          losses or make the business profitable.  Petitioner did not                 
          provide any evidence that he changed his business plan in order             
          to make the business profitable.  The magnitude of M&S’s                    
          continuing losses in comparison to the revenues M&S received                
          negates a profit objective.                                                 
               Elements of personal pleasure or recreation from an activity           
          may indicate that the activity was not engaged in for profit.               
          Sec. 1.183-2(b)(9), Income Tax Regs.  Petitioner stated in                  
          documents filed with the Superior Court that he supported his               
          daughter’s interest through the years by providing for the costs            
          of maintaining her horses and paying for riding competitions.               
          Petitioner has provided no credible evidence that he owned any              
          horses other than those used by his daughter for recreational               
               Based on the preponderance of the evidence, and particularly           
          the large, recurring, and unlikely to be recouped losses, we                

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