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any gain from the sale of a horse, she neglected to include it on
her Schedule C for the applicable year. The Court finds that
this factor weighs against the existence of a profit objective.
D. Profit From the Activity
Some profit, even if only occasional, may indicate that an
activity is engaged in for profit. Sec. 1.183-2(b)(7), Income
Tax Regs. Absent actual profits, the opportunity to earn
substantial profits in a highly speculative venture may be
sufficient to indicate that an activity is engaged in for profit.
See id. Petitioner never put herself in a position to earn a
profit in the year at issue. She did not enter her horses in
competitions that paid cash prizes, but only in those that
awarded points. None of her horses were entered into any
competitions during the taxable year. She never advertised any
of her horses for sale. While petitioner could have recouped
some of her losses through the sale of her horses (one of which
was a successful brood mare with a proven record of performance
in competition) at the time she ended her participation in the
activity, she chose not to. She chose instead to give the horses
away to a friend. Petitioner testified that the market for
horses was down and that she would not have been able to fetch a
good price for her horses; if a profit objective had been at the
heart of her participation in this activity, petitioner should
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