- 45 -
fact, conducted for profit as evidenced by other factors.
Sec. 1.183-2(b)(9), Income Tax Regs.
Despite petitioner’s testimony that her horse activity
did not have any personal or recreational aspects,
petitioner certainly derives some personal pleasure from
riding and showing her horses, as discussed above. However,
this does not, by itself, indicate that petitioner lacked a
profit motive. Accordingly, this factor is neutral.
Conclusion
Petitioner repeatedly testified that she intended to
derive a profit from her horse activity and wished to use
the activity as her source for retirement income.
Petitioner’s assertions, however, are not supported by the
facts. In 16 years of operation, petitioner had 1
profitable year. Despite continual heavy losses, petitioner
did not seek out expert advice, or attempt to educate
herself, on the economic aspects of running a profitable
horse-breeding business. Petitioner did not operate the
activity in a businesslike manner. In addition, if not for
her significant annual wage and rental income, petitioner
would have been unable to continue the horse activity at a
loss year after year. The only factor weighing in favor of
petitioner, the appreciation of Falling Water Way and
Page: Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 NextLast modified: May 25, 2011