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with a primary objective of realizing a profit. We hold that
petitioners’ exotic animal breeding activity during the years in
issue was not an activity engaged in for profit within the
meaning of section 183.
III. Respondent’s Alternative Position
Respondent argues that if we find that petitioners’ exotic
animal breeding activity was conducted for profit, petitioners’
claimed Schedule F expense deductions on their 2000 and 2001
income tax returns should be reclassified as capital expenses and
depreciated, and certain expenses should be disallowed for lack
of substantiation. Because we find that petitioners’ exotic
animal breeding activity was not an activity engaged in for
profit during 2000 and 2001, we need not address respondent’s
alternative position.
To reflect the foregoing,
Decision will be
entered for respondent.
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