Albert R. Matthews - Page 8

                                        - 7 -                                         
               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              






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011