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necessarily mean that they kept or used books and records in a
businesslike fashion); Steele v. Commissioner, T.C. Memo. 1983-63
(checks were not businesslike records although they sufficed to
substantiate claimed expenses). Although a taxpayer such as
petitioner need not maintain a sophisticated cost accounting
system for any or all of her purported business activities, she
is expected to keep records that enable her to make informed
business decisions as to the activity, see Burger v.
Commissioner, 809 F.2d at 359, and otherwise allow her to cut
expenses, increase profits, or evaluate the activity’s overall
performance, see Sullivan v. Commissioner, T.C. Memo. 1998-367,
affd. without published opinion 202 F.3d 264 (5th Cir. 1999);
Abbene v. Commissioner, T.C. Memo. 1998-330; Steele v.
Commissioner, supra. Petitioner presented no credible evidence
that she used any record to implement cost-saving measures or to
improve profitability.
B. Conducting the Activity Similarly to Comparable
Businesses Which Are Profitable
The fact that a taxpayer operates an activity similarly to a
comparable business which is profitable indicates that the
taxpayer had a profit objective as to the activity.
Petitioner did not conduct the horse activity similarly to
the manner in which she understood that comparable businesses
conducted their horse breeding activities. As to other breeders,
petitioner testified that most of them “just breed away”.
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