Albert R. Matthews - Page 11

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          ranchers experience a history of operating losses as money is               
          spent improving their land but will make a profit when they                 
          eventually sell their ranches.  Petitioner stated that the value            
          of his ranch has appreciated significantly, and he estimated that           
          the value of his ranch has increased from $150 per acre to                  
          approximately $1,000 to $1,500 per acre.                                    
               Without supporting documentation, petitioner’s testimony is            
          self-serving, and it is well established that this Court is not             
          bound to accept at face value such unverified testimony from a              
          taxpayer.  See Shea v. Commissioner, 112 T.C. 183, 189 (1999);              
          Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).                            
               We apply the nine factors provided in the regulations, sec.            
          1.183-2(b), Income Tax Regs., to the limited evidence petitioner            
          introduced to prove that he was engaged in his horse activity for           
          profit.                                                                     
               In the complete absence of books and records, we can only              
          conclude that petitioner did not engage in his horse activity in            
          a businesslike manner.  Although petitioner claims that he sent             
          receipts to his accountant twice a year for purposes of                     
          maintaining books and records for his ranch, petitioner did not             
          introduce these books and records into evidence.  In addition,              
          petitioner did not develop a budget or an informal business plan            
          to project whether the horse activity could be operated                     
          profitably, did not have a separate bank account for his horse              






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