Sheila Mae Howard - Page 14

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          with the objective of making a profit.  Dodge v. Commissioner,              
          T.C. Memo. 1998-89, affd. without published opinion 188 F.3d 507            
          (6th Cir. 1999).                                                            
               A taxpayer’s expertise, research, and study of an activity,            
          as well as his or her consultation with experts, may be                     
          indicative of a profit objective.  Sec. 1.183-2(b)(2), Income Tax           
          Regs.  However, the fact that petitioner had some experience with           
          horses prior to entering into the horse breeding activity does              
          not alone show that the horse breeding activity was engaged in              
          with a profit objective.  See Glenn v. Commissioner, T.C. Memo.             
          1995-399, affd. without published opinion 103 F.3d 129 (6th Cir.            
               Petitioner also sought general advice from other breeders              
          and trainers.  However, there is no evidence that petitioner                
          reviewed the records of other breeding operations or sought                 
          specific advice as to how to make her operation profitable.                 
          Petitioner did not point to any evidence that demonstrated how              
          she planned to reduce her losses and ultimately earn a profit               
          sufficient to recoup past losses.  See Burger v. Commissioner,              
          T.C. Memo. 1985-523, affd. 809 F.2d 355 (7th Cir. 1987).                    
               The devotion of a great deal of personal time and effort by            
          the taxpayer in carrying on an activity may indicate that it is             
          engaged in for profit, particularly if there are no substantial             
          personal or recreational elements associated with such activity.            

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