Jane Freed - Page 11

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          that she did not conduct her thoroughbred horse breeding and                
          racing activities in a businesslike manner.                                 
               2.  The Expertise of the Taxpayers or Their Advisers                   
               We next consider petitioner’s expertise or the expertise of            
          her advisers in her thoroughbred horse breeding and racing                  
          activities.   Efforts to gain experience and a willingness to               
          follow expert advice are considered in deciding whether a                   
          taxpayer has a profit objective.  Sec. 1.183-2(b)(2), Income Tax            
          Regs.  Preparing for an activity by consulting with experts may             
          indicate that a taxpayer has a profit motive if the taxpayer                
          follows that advice.  Id.                                                   
               Petitioner asserts, and we agree, that both she and her                
          advisers possess the requisite expertise in thoroughbred horse              
          breeding and racing to indicate a profit motive.  She herself has           
          been involved with different aspects of the thoroughbred horse              
          industry since the late 1960s, and she has been involved in her             
          current capacity as an owner in the industry since the early                
          1980s.                                                                      
               Further, her advisers are experts in thoroughbred horse                
          breeding and racing as well.  Her breeding manager, McMahon, owns           
          and operates a thoroughbred horse farm that produced Funny Cide,            
          who won both the Kentucky Derby and the Preakness in the same               
          year.  Petitioner also employed professional trainers all over              
          the country, and her CPA has handled the books for her                      






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