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In addition to caring for the animals, petitioners spent a
significant amount of time maintaining and improving ERE’s
facilities. Mrs. Knudsen regularly performed duties that were
not pleasurable or recreational, such as cleaning animal cages
and stalls and disposing of animal carcasses. As a result of her
duties, she also suffered several physical injuries. Dr. Knudsen
personally did most of the landscaping on the property to provide
the animals with a natural habitat.
The record does not contain evidence that petitioners’
facilities were extravagant or that they were not constructed for
the benefit of the animals. Petitioners maintained their
property in accordance with USDA regulations. In addition,
petitioners constructed a home on the property, at least in part,
to enable them to care for their animals.
Although petitioners derived some pleasure from their exotic
animal breeding activity, we conclude that petitioners were not
engaged in the activity solely for personal pleasure or
recreation.
This factor is neutral.
C. Conclusion
After considering the factors listed in section 1.183-2(b),
Income Tax Regs., all contentions presented by the parties, and
the unique facts and circumstances of this case, we conclude that
petitioners did not enter the exotic animal breeding activity
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