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e. Summary
Taking into consideration the above, we conclude that
petitioner did not operate her horse activity in a businesslike
manner. This factor weighs in favor of respondent’s position.
2. Expertise of Petitioner or Her Advisers
Preparation for an activity by extensive study of its
accepted business, economic, and scientific practices, or
consultation with those who are expert therein, may indicate a
profit motive. Engdahl v. Commissioner, 72 T.C. at 668;
Lundquist v. Commissioner, T.C. Memo. 1999-83, affd. 211 F.3d 600
(11th Cir. 2000); sec. 1.183-2(b)(2), Income Tax Regs. Efforts
to gain experience and a willingness to follow expert advice may
also indicate a profit motive. Dworshak v. Commissioner, T.C.
Memo. 2004-249; Lundquist v. Commissioner, supra.
Petitioner has been involved with raising and showing horses
since she was a child. Petitioner has consulted many
professionals regarding breeding and training horses, including
David Garrett and Lou Roper. In addition, petitioner has read
many books and publications regarding the breeding and training
of horses. While petitioner undoubtedly has expertise in
breeding and training, her expertise does not extend to the
economics of the undertaking.
Petitioner testified that, when she started her horse
activity, she had no idea how many Arabian horse breeders there
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