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$6,700 and a loss of $882. Mrs. Cooper testified that she did
not report mileage expenses and the cost of purchasing a dog so
that the dog breeding business would seem more profitable.
Additionally, she used money she received from dog sales to fund
her horse activities.
No evidence was provided to demonstrate that petitioner
participated in Mrs. Cooper’s horse barrel-racing activities in
any manner other than providing financing. Thus, any success he
may have had as an automotive salesperson has no bearing on the
assessment of the horse barrel-racing activities.
Factors (6) and (7): Taxpayer’s History of Income or Losses
With Respect to the Activity and The Amount of Occasional
Profits, If Any, Which Were Earned
An activity’s history of income or loss may reflect whether
the taxpayer has a profit motive. Sec. 1.183-2(b)(6), Income Tax
Regs. Unless explained by customary business risks or unforeseen
or fortuitous circumstances beyond the taxpayer’s control, a
record of continuous losses beyond the period customarily
required to attain profitability may indicate that the activity
is not engaged in for profit. Id.
Respondent prepared SFRs for petitioner’s accounts for 1999,
2000, and 2001. No allowances were made for any expenses
regarding Mrs. Cooper’s horse barrel-racing activities.
Respondent disallowed the loss claimed by petitioner on his
subsequently filed 2001 Form 1040. Petitioner has not yet filed
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