Jane Freed - Page 15

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          did not find this factor determinative.  We decline petitioner’s            
          invitation.  It is for this Court to decide how much weight to              
          attribute to each factor.                                                   
               Petitioner admitted she had never earned a profit while she            
          was involved with her previous thoroughbred horse activities.  We           
          have found this as a fact.                                                  
               6.  The Taxpayer’s History of Income or Loss With Respect              
               to the Activity                                                        
               We next examine petitioner’s history of income or loss with            
          respect to the activity.  A history of substantial losses may               
          indicate that the taxpayer did not conduct the activity for                 
          profit.  Golanty v. Commissioner, 72 T.C. 411, 427 (1979); sec.             
          1.183-2(b)(6), Income Tax Regs.  Losses during the initial stage            
          of an activity do not necessarily indicate, however, that the               
          activity was not conducted for profit.  Engdahl v. Commissioner,            
          72 T.C. 659 (1980); sec. 1.183-2(b)(6), Income Tax Regs.                    
               Petitioner began her thoroughbred horse activities in 1982             
          and incurred losses of more than $1.1 million as of 1996, the               
          year at issue.  Petitioner contends that we should disregard her            
          history of losses because the small chance to earn a large profit           
          may indicate an intent to earn a profit.                                    
               We find nothing in the record to support petitioner’s claim.           
          Petitioner never took any steps to put herself in position to               
          earn the substantial profit necessary to recoup her previous                
          losses.  She engaged in similar breeding patterns year after year           





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