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On Schedule F of the above respective tax returns the
following gross income, expenses, and net losses were reported
relating to petitioner’s horse activity:
Year Gross Income Expenses Net Losses
1996 $ 144 $ 22,227 $ (22,083)
1997 178 22,187 (22,009)
1998 335 48,289 (47,954)
1999 432 44,784 (44,352)
2000 750 50,550 (49,800)
2001 1,200 84,382 (83,182)
2002 1,418 102,550 (101,132)
Total $4,457 $374,969 $(370,512)
Petitioner’s horse activity losses reduced petitioners’
reported taxable income and resulted in claimed tax savings in
the amount of the tax deficiencies involved herein.
OPINION
The deductibility under section 162 or section 212 of
taxpayer expenses attributable to an activity depends upon
whether the activity is carried on for profit. See secs. 162,
183, 212.
Section 183 specifically precludes deductions for expenses
relating to an activity not carried on for profit except to the
extent allowed by section 183(b). For example, deductions are
not allowable under section 162 or section 212 for expenses of an
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