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against a finding that petitioner had the requisite profit
objective.
C. Losses From the Activity
A taxpayer’s history of income or losses with respect to the
activity can indicate whether a profit objective was present.
Sec. 1.183-2(b)(6), Income Tax Regs. Petitioner estimated at
trial that she incurred approximately $8,300 in expenses related
to the horse showing and breeding activities that she did not
deduct on her Federal income tax return for a previous taxable
year. Without taking those expenses into account, petitioner has
claimed $43,289--all as losses--in deductions from the
commencement of these activities in 1998 through the taxable year
in issue. In petitioner’s favor is the fact that she ceased
involvement with the activity in 2005.
Horse breeding is an activity subject to unforeseen risks,
such as the premature death of a horse. In addition, petitioner
could have been considered to be in a startup phase as 2001
represented only her fourth year of participation in an activity
with a long investment period. While cases have held that horse-
breeding activities may be engaged in for profit despite
consistent losses during the startup phase, see Golanty v.
Commissioner, supra at 427, it is not merely the absolute loss
that the Court must consider. Rather, it is the overall record,
and most notably the fact that the one time petitioner realized
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