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Petitioner also claims that she undertook to decrease the
horse activity’s operating expenses by learning in 1993 and 1994
to perform some basic veterinary services. Even assuming that
petitioner learned to perform these services as claimed, an
assumption that is not supported by the credible evidence in the
record, such efforts did not effectively decrease the horse
activity’s veterinary expenses. Petitioner’s tax returns from
1988 through 2002 show that the horse activity’s veterinary
expenses have remained fairly constant throughout all of the
years of the horse activity’s operation.19
D. Conclusion
We conclude on the basis of our analysis of the just-
discussed three subfactors that petitioner did not carry on the
horse activity in a businesslike manner. This factor favors
respondent.
2. Petitioner’s Expertise
A taxpayer’s expertise, research, and study of the accepted
business, economic, and scientific practices of an activity, as
well as his or her consultation with experts, may be indicative
of a profit objective. Sec. 1.183-2(b)(2), Income Tax Regs.
19 Nor are we persuaded that petitioner acted in a
businesslike fashion by first leasing Borissa and buying it only
after ascertaining that its foal was of “excellent” quality. We
know little about this lease. Moreover, given that VT Kartel
experienced medical complications beginning with its birth and
died 9 months later, the facts at hand would appear to disprove
petitioner’s claim that VT Kartel was an “excellent” foal.
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