- 44 -
except for 2001 when it reported a small profit of $209 on
account of the sale of Bogaz. As to its entire existence though
2002, the horse activity reported gross income totaling $42,291,
expenses totaling $459,950, and net losses totaling $417,659.26
The magnitude of the horse activity’s losses in comparison to its
gross income is an indication that petitioner lacked a profit
objective as to that activity. See Burger v. Commissioner,
809 F.2d at 359; Dodge v. Commissioner, T.C. Memo. 1998-89.
Such an indication is especially glaring given that none of
petitioner’s explanations for her history of losses adequately
explains the magnitude and duration of those losses and that the
record does not include any credible evidence to suggest that
petitioner ever expected to recoup any of those losses. The fact
that the horse activity suffered losses year after year and that
petitioner took no meaningful action to reverse the tide supports
a finding that she was indifferent as to whether the losing trend
could be reversed. Ranciato v. Commissioner, 52 F.3d 23, 25-26
(2d Cir. 1995), vacating T.C. Memo. 1993-536.
This factor favors respondent.
7. Amounts of Occasional Profits
The amount of profits earned in relation to the amount of
losses incurred, the amount of the investment, and the value of
26 Petitioner also admitted at trial that she was most
likely going to report a net loss for 2003.
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