Gilbert Hahn, Jr. and Margot H. Hahn - Page 16

                                       - 16 -                                         
          Petitioner’s letters to the bank, however, leave some unanswered            
          questions regarding those assertions.                                       
               We also are unable to conclude, for the purpose of the                 
          instant motion, that the horse breeding activity was a trade or             
          business.  To be engaged in a trade or business within the                  
          meaning of section 162, “the taxpayer’s primary purpose for                 
          engaging in the activity must be for income or profit.”                     
          Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987).  We                    
          generally consider nine nonexclusive factors in deciding whether            
          a taxpayer has maintained the requisite profit motive.  Dreicer             
          v. Commissioner, 78 T.C. 642, 644 (1982), affd. without opinion             
          702 F.2d 1205 (D.C. Cir. 1983); sec. 1.183-2(b), Income Tax Regs.           
               If petitioner is correct that he conducted the activity in a           
          businesslike manner and used expert advisers, such factors would            
          tend to indicate a profit motive.  Sec. 1.183-2(b)(1) and (2),              
          Income Tax Regs.  However, the activity’s history of losses and             
          petitioner’s financial status are factors that weigh against                
          petitioner.  Sec. 1.183-2(b)(6), (8), Income Tax Regs.                      
          Additionally, there are several remaining factors that are not              
          addressed in the pleadings and other materials submitted by the             
               We also note that respondent’s failure to disallow losses              
          from the activity in prior years does not establish that it was a           
          trade or business in 1995.  Each taxable year stands on its own,            

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next 

Last modified: November 10, 2007