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From 1997 through 1999, petitioner worked twelve to eighteen
12-hour shifts each month as a full-time emergency room
physician. Petitioner also worked part time for other medical-
related entities in addition to his full-time work. Petitioner
worked approximately 180 hours each month.
Nevertheless, petitioner spent some of his time working with
his wife in the maintenance and care of their horse breeding
activity. He traveled to horse shows with his wife. He
purchased feed and cleaned, bathed, brushed, and fed the horses.
He took care of the horse farm and ran errands that benefited the
horses. Petitioner’s wife, however, did most of the work
regarding the care of the horses. Petitioner did not use the
horses for more than minimal personal or recreational use. This
factor weighs in petitioner’s favor.
4. The Expectation That the Assets Used in the
Activity May Appreciate in Value
A taxpayer’s expectation that assets such as land and other
tangible property used in an activity may appreciate in value to
create an overall profit may indicate that the taxpayer has a
profit objective as to that activity. Sec. 1.183-2(b)(4), Income
Tax Regs. An overall profit is present if net earnings and
appreciation are enough to recoup losses sustained in prior
years. Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965), affd.
379 F.2d 252 (2d Cir. 1967).
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