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necessary business expenses. Respondent disallowed petitioner’s
Schedule C losses of $22,777 and $17,649 for 1999 and 2000,
respectively. Respondent also disallowed petitioner’s Schedule C
expenses of $19,791 for 2001. Respondent determined deficiencies
of $7,117, $5,470, and $6,793 for 1999, 2000, and 2001,
respectively. In addition, respondent determined petitioner was
liable for accuracy-related penalties under section 6662(a) for
the years in issue.
On September 9, 2003, petitioner filed a petition with the
Court disputing the notice of deficiency.
OPINION
A. Petitioner’s Horse Activity
The first issue for decision is whether petitioner’s horse
activity was an activity engaged in for profit within the meaning
of section 183 during the years in issue.9
Section 183(a) provides that if an individual engages in an
activity but does not engage in that activity for profit, “no
deduction attributable to such activity shall be allowed under
this chapter except as provided in this section.” In the case of
9 Generally, a taxpayer bears the burden of proving the
Commissioner’s determinations incorrect. Rule 142(a)(1); Welch
v. Helvering, 290 U.S. 111, 115 (1933). However, under sec.
7491(a), the burden of proof may shift to the Commissioner in
certain situations. Petitioner contends that sec. 7491(a)
requires respondent to bear the burden of proof. We need not
decide this issue because our findings and analysis in this case
are based on the record before the Court and do not depend on
which party bears the burden of proof.
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