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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.
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