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elements of personal pleasure or recreation. No single factor is
determinative, and not all factors are applicable in every case.
See Allen v. Commissioner, 72 T.C. 28, 34 (1979); sec. 1.183-
2(b), Income Tax Regs.
In making our evaluation of the foregoing factors, we may
consider evidence from years subsequent to the years in issue “to
the extent it may create inferences regarding the existence of a
profit motive in the earlier years.” Hillman v. Commissioner,
T.C. Memo. 1999-255 (citing Hoyle v. Commissioner, T.C. Memo.
1994-592). “[A]ctual profits or losses in those and subsequent
years have probative, although not determinative, significance in
such evaluation.” Smith v. Commissioner, T.C. Memo. 1993-140.
B. Applying the Factors
1. The Manner in Which Petitioners Conducted the
Activity
In deciding whether a taxpayer has conducted an activity in
a businesslike manner, we consider whether complete and accurate
books and records were maintained, whether the activity was
conducted in a manner substantially similar to other activities
of the same nature that were profitable, and whether changes in
operating methods, adoption of new techniques, or abandonment of
unprofitable methods was done in a manner consistent with an
intent to improve profitability. See Engdahl v. Commissioner, 72
T.C. 659, 666-667 (1979); sec. 1.183-2(b)(1), Income Tax Regs.
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