- 48 -
fisc; i.e., petitioner used her reported losses from the horse
activity to reduce significantly her taxable income in every year
but one, which in turn reduced her income tax liability for those
years. Contrary to petitioner’s assertion, we do not believe
that she engaged in the horse activity to obtain a source of
retirement income. In addition to the fact that she has an IRA,
she owns valuable assets in the form of the Gavilan Hills
property, her established dental practice, and the land and
building on and in which her dental practice is located.
This factor favors respondent.
9. Elements of Personal Pleasure
The presence of personal pleasure or recreation from an
activity may indicate the absence of a profit objective. See id.
The mere fact that a taxpayer derives personal pleasure from an
activity, however, does not necessarily mean that he or she lacks
a profit objective with respect thereto. A profit objective may
be present in the latter case if the activity is truly engaged in
for profit as evidenced by other factors. Jackson v.
Commissioner, 59 T.C. 312, 317 (1972).
Petitioner asserts that the horse activity is neither
recreational nor pleasurable to her because (1) she devotes 30
hours per week to the mundane jobs of feeding, maintaining,
grooming, and training her horses and (2) she never rides her
horses recreationally. Petitioner concludes that this factor
Page: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 NextLast modified: May 25, 2011