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Regulations promulgated under section 183 provide the
following nonexclusive list of factors which normally should be
considered in determining whether an activity was engaged in for
profit: (1) The manner in which the taxpayer carried on the
activity; (2) the expertise of the taxpayer or his advisers; (3)
the time and effort expended by the taxpayer in carrying on the
activity; (4) the expectation that the assets used in the
activity may appreciate in value; (5) the success of the taxpayer
in carrying on other similar or dissimilar activities; (6) the
taxpayer’s history of income or losses with respect to the
activity; (7) the amount of occasional profits, if any, which are
earned; (8) the financial status of the taxpayer; and (9)
elements of personal pleasure or recreation. Sec. 1.183-2(b),
Income Tax Regs. No single factor, nor the existence of even a
majority of the factors, is controlling, but rather it is an
evaluation of all the facts and circumstances in the case, taken
as a whole, that is determinative. Golanty v. Commissioner, 72
T.C. 411, 426-427 (1979), affd. without published opinion 647
F.2d 170 (9th Cir. 1981); sec. 1.183-2(b), Income Tax Regs.
Petitioner claims that he engaged in his horse activity with
a profit objective, but he has not introduced any records or
documentation to substantiate his claims. A taxpayer is required
to maintain records sufficient to substantiate deductions that he
claims on his tax return. Sec. 6001; sec. 1.6001-1(a), Income
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Last modified: May 25, 2011