- 12 - thoroughbred horse activities for 14 years and has many other clients who raise horses as well. We place little weight on respondent’s argument that petitioner lacks the requisite expertise because neither she nor her advisers are experts in the economics of thoroughbred horses. Petitioner does not need advanced training in economics to know that a thoroughbred horse that wins races is more valuable than one that does not. Petitioner’s advisers have demonstrated an expertise in breeding and training winning thoroughbreds, and she has demonstrated a willingness to solicit and follow their advice. 3. The Time and Effort Expended by the Taxpayer in Carrying On the Activity We next consider the time and effort petitioner expended in carrying on her thoroughbred horse breeding and racing activities. A taxpayer’s devotion of much time and effort to conducting an activity, particularly if the activity does not involve recreational aspects, may indicate that he or she has a profit objective. Sec. 1.183-2(b)(3), Income Tax Regs. Petitioner claims to have spent 10 to 20 hours per week on bookkeeping alone. In addition, she claims that she spent time reading industry-related publications as well as time talking to her breeding and training managers. Respondent counters that petitioner overstated the amount of time and points out that,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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