Nora E. Keating and Richard L. Shearer - Page 11




                                       - 11 -                                         
          647 F.2d 170 (9th Cir. 1981).  Greater weight is given to                   
          objective facts than to a taxpayer’s mere statement of intent.              
          Dreicer v. Commissioner, supra at 645.                                      
               We consider each of these factors in turn.                             
                                                                                     
          Manner in Which Petitioner Carried On Her Horse Activity                    
               The regulations under section 183 provide that carrying on             
          an activity in a businesslike manner indicates a profit                     
          objective.  Sec. 1.183-2(b)(1), Income Tax Regs.  The regulations           
          explain that businesslike operations typically would involve the            
          maintenance of complete and accurate books and records, the                 
          conduct of the activity in a manner similar to profitable                   
          businesses of the same nature, and changes to improve operations            
          and profitability.  See id.  Numerous court opinions mention that           
          a businesslike operation often would involve a business plan.               
          See, e.g., Wesinger v. Commissioner, T.C. Memo. 1999-372.                   
               With respect to books and records, we have held that the               
          maintenance of mere lists of and receipts for expenses without              
          any further cost accounting or analysis would not reflect good              
          business practices.  See Wesinger v. Commissioner, supra; Dodge             
          v. Commissioner, T.C. Memo. 1998-89, affd. without published                
          opinion 188 F.3d 507 (6th Cir. 1999); Burger v. Commissioner,               
          T.C. Memo. 1985-523, affd. 809 F.2d 355 (7th Cir. 1987).                    
               The term “businesslike manner” contemplates the use of cost            
          accounting techniques that provide the taxpayer with information            






Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next 

Last modified: November 10, 2007