- 32 -
library might possibly contain information regarding the business
aspects of horse breeding. She further testified that some of
the monthly publications contained business information.
However, petitioner did not testify to how she used this
information, if at all, in her activity.
On the basis of the above, we conclude that petitioner was
not an expert and did not seek out expert advice regarding the
economic aspects of running a profitable horse-breeding business.
This factor weighs in favor of respondent’s position.
3. Time and Effort Petitioner Expended in Carrying
On the Activity
The fact that the taxpayer devotes much of her personal time
and effort to carrying on an activity may indicate an intention
to derive a profit, particularly if the activity does not have
substantial personal or recreational aspects. Golanty v.
Commissioner, 72 T.C. at 426; Sullivan v. Commissioner, T.C.
Memo. 1998-367, affd. 202 F.3d 264 (5th Cir. 1999); Morley v.
Commissioner, T.C. Memo. 1998-312;11 sec. 1.183-2(b)(3), Income
Tax Regs.
11 Petitioner places heavy emphasis on Morley v.
Commissioner, T.C. Memo. 1998-312, where the Court held that the
taxpayer operated his horse activity for profit. Like
petitioner, Mr. Morley worked 4 days a week in his dental
practice and 7 days a week with his horse activity. However, the
present case is readily distinguishable. Among other
differences, Mr. Morley advertised, created promotional
materials, and was not involved in the recreational components of
horse ownership, specifically riding his horses, to any
significant extent.
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