- 41 - objective. We disagree. Petitioner purchased the Gavilan Hills property aspiring to sell the Falling Water Way property, build and move her residence on and to the Gavilan Hills property, and design the Gavilan Hills property so that she could continue her horse activity and possibly expand that activity to include the boarding of horses. She conceded through her testimony, however, that she abandoned this aspiration incident to her purchase of the Gavilan Hills property. As to the fact that she sometimes rode her horses on the Gavilan Hills property, we do not believe that this action, which we view to be more pleasure than business, serves to characterize that property as a business asset. Nor do we believe that the Gavilan Hills property is properly construed as an asset of the horse activity merely because petitioner envisioned that she could someday sell it and invest the proceeds in the development of a new location for the horse activity or the start of a new horse boarding activity. This factor favors respondent. 5. Taxpayer’s Success in Similar or Dissimilar Activities Although an activity is unprofitable, the fact that a taxpayer has previously converted comparable activities from unprofitable to profitable enterprises may show a profit objective. Sec. 1.183-2(b)(5), Income Tax Regs. Petitioner notes that she successfully established her dental practice and argues that this factor weighs in her favor.Page: Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Next
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