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activity for profit, particularly if the losses generate
substantial tax benefits. Engdahl v. Commissioner, supra at
669-670; sec. 1.183-2(b)(8), Income Tax Regs.
Petitioner is a dentist and runs her own dental
practice as a professional corporation. From 1988 through
2003, petitioner received wage income from her professional
corporation averaging $109,547 annually. In addition, since
1997, petitioner has reported average annual rental income
of $7,871.
Despite her significant sources of current income,
petitioner argues that her lack of investments and other
resources on which to retire indicate that she is running
her horse activity for profit. Petitioner testified that
she is not the owner or beneficiary of any trusts,
annuities, or pension plans, and her only investments
consist of an individual retirement account worth less than
$25,000 and stocks and bonds worth less than $20,000.
Petitioner further testified that she intended her horse
activity to be her source of retirement income.
In making this argument, petitioner disregards the
value of her real property. As of June 15, 2004, the
combined fair market value of Falling Water Way and Gavilan
Hills was $836,000. The fair market value of the Rialto
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