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with the objective of making a profit. Dodge v. Commissioner,
T.C. Memo. 1998-89, affd. without published opinion 188 F.3d 507
(6th Cir. 1999).
Inasmuch as petitioner was a sufficiently competent
professional in other areas, her lack of businesslike treatment
of these activities weighs against a finding that petitioner had
the requisite profit objective.
B. Petitioner’s Research Into the Activity
A taxpayer’s expertise, research, and study of an activity,
as well as his or her consultation with experts, may be
indicative of a profit objective. Sec. 1.183-2(b)(2), Income Tax
Regs. Petitioner sought general advice from the few breeders and
trainers she knew and with whom she was already friendly. She
attended shows and read trade literature. There is no evidence
however, that petitioner reviewed the records of other breeding
operations or that she sought specific advice as to how to make
her own operation profitable. Petitioner had no idea how
saturated the horse-breeding market may have been before entering
it. She chose Appaloosas because of their beauty and not because
they represented a good business investment. Petitioner used
only a single stallion to breed with her mare, and the stallion
required live insemination visits to be successful; there is no
indication that any research was done to determine the cost-
effectiveness of this arrangement. This factor also weighs
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