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Hills property and possibly expand that activity to include the
boarding of horses. At or around the time that she bought the
Gavilan Hills property, she abandoned this aspiration when she
realized that she could not sell the Falling Water Way property
at the price that she believed was necessary to fulfill her
aspiration. Petitioner now intends to sell the Gavilan Hills
property undeveloped.
Petitioner has paid property taxes for the Gavilan Hills
property during each year that she has owned it. She has not
claimed any of those taxes on the Schedules C that she filed for
the horse activity.
OPINION
This is yet another case of a high-salaried taxpayer
claiming that she may reduce the income taxes payable on her
salary by deducting losses incurred in a pastime that is
allegedly engaged in for profit. We must decide whether
petitioner’s horse activity was “an activity not engaged in for
profit” within the meaning of section 183 during 1997 and 1998.
If it was, petitioner may not deduct for those years the amounts
of losses greater than her income from that activity. Although
petitioner argues in brief that respondent bears the burden of
proof pursuant to section 7491(a)(1), petitioner’s counsel (on
behalf of petitioner) conceded at trial that petitioner bears the
burden of proof. Petitioner also made a similar concession in
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