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horse from 1988 through 2003, we find that her failure to
advertise in an attempt to reach a larger customer base is not
consistent with a profit motive. See Dodge v. Commissioner, T.C.
Memo. 1998-89, affd. without published opinion 188 F.3d 507 (6th
Cir. 1999).
Petitioner maintains a separate bank account under the names
Elizabeth Giles and Falling Water Arabians. However, it is clear
from the record that petitioner did not use the account in
conducting her horse activity. From December 16, 1998, to
December 3, 2001, petitioner made a single withdrawal of $240,
not including the monthly deductions for maintenance fees. The
purpose of the withdrawal was not identified in the record. In
addition, Ms. Pope testified that the canceled checks she used to
prepare petitioner’s annual profit and loss statements were not
from the Elizabeth Giles and Falling Water Arabians bank account.
During the years in issue, there were only two deposits into
the account. On May 5, 2001, petitioner deposited $9 in order to
restore a positive account balance. On December 4, 2001,
petitioner deposited $20,000 received from the sale of Bogaz.
Petitioner invested the $20,000 in an individual retirement
account, which is clearly not related to her horse activity. On
the basis of the above, we find that petitioner did not maintain
the bank account in a businesslike manner.
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