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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.
1996).
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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