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As a consequence, any anticipated appreciation in the Maple
Row land is not considered in ascertaining the existence of an
intent to profit from the cattle activity. See Roberts v.
Commissioner, T.C. Memo. 1987-404; Hambleton v. Commissioner,
T.C. Memo. 1982-234. With respect to the livestock, we have
previously found that petitioners’ purebred herd was growing
during the years in issue, and that they were breeding bulls that
sold for approximately $2,000 each. These factors indicate that
petitioners had an expectation that the herd would appreciate;
under section 1.183-2(b)(4), Income Tax Regs., this expectation
tends to indicate the existence of an intent to profit.
5. Past Success in Similar or Dissimilar Activities
A taxpayer's past success in similar or dissimilar
activities may indicate that his engagement in a presently
unprofitable activity is for profit. Sec. 1.183-2(b)(5), Income
Tax Regs. Petitioners have enjoyed at least moderate success
with MRC, Dr. Burrus has been successful in his medical practice,
and the missionary hospital he established in Africa is still
operating. Petitioners’ prior experience with cattle breeding at
FBHR was unsuccessful, at least if the appreciation in the value
of the Cheatham Property during that period is disregarded. If
the more than doubling in value of the Cheatham Property during
the period it was held by the FBHR partnership is taken into
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