N. Thomas Ryan - Page 11

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          house, barn, or garage or other places.  Petitioner retained some           
          canceled checks, but his records were incomplete.                           
               Petitioner did not develop a business plan.  He never                  
          consulted an accountant or purchased accounting software for his            
          horse breeding activity.  Petitioner did not prepare a written              
          analysis of the time it would take him to break even or make a              
          profit.                                                                     
               Petitioner’s wife met with two people in the horse breeding            
          business.  She discussed the financial aspects of their                     
          respective operations and the feasibility of entering into the              
          horse breeding business.  Petitioner did not present any evidence           
          as to how these discussions affected the conduct of the activity.           
               Petitioner did not conduct the horse training and breeding             
          activity in a businesslike manner.  This factor weighs against              
          petitioner.                                                                 
                    2.  The Expertise of the Taxpayer or His Advisers                 
               A taxpayer’s expertise and extensive study of an activity’s            
          accepted business and economic practices, or consultation with              
          experts, may indicate a profit objective.  Sec. 1.183-2(b)(2),              
          Income Tax Regs.                                                            
               Petitioner did not consult with experts to become                      
          knowledgeable about techniques of training and breeding horses,             
          nor did he learn the economics of the activity.  As previously              
          indicated, petitioner’s wife spoke with two persons about the               






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