Rhett Rance Smith and Alice Avila Smith, et al. - Page 50




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          1205 (D.C. Cir. 1983); sec. 1.183-2(a), Income Tax Regs.  In                
          making this determination, more weight is accorded to objective             
          facts than to the taxpayer’s statement of intent.  Engdahl v.               
          Commissioner, 72 T.C. 659, 666 (1979).                                      
               Factors to be considered in determining whether an activity            
          is engaged in for profit include:  (1) The manner in which the              
          taxpayer carries on the activity; (2) the expertise of the                  
          taxpayer or his advisers; (3) the time and effort expended by the           
          taxpayer in carrying on the activity; (4) the expectation that              
          assets used in the activity may appreciate in value; (5) the                
          success of the taxpayer in carrying on other similar or                     
          dissimilar activities; (6) the taxpayer’s history of income or              
          losses with respect to the activity; (7) the amount of occasional           
          profits, if any, which are earned; (8) the financial status of              
          the taxpayer; and (9) the elements of personal pleasure or                  
          recreation.  All facts and circumstances are to be taken into               
          account and no single factor or group of factors is                         
          determinative.  Indep. Elec. Supply, Inc. v. Commissioner, 781              
          F.2d 724, 726-727 (9th Cir. 1986), affg. Lahr v. Commissioner,              
          T.C. Memo. 1984-472; Golanty v. Commissioner, 72 T.C. 411, 425-             
          426 (1979), affd. without published opinion 647 F.2d 170 (9th               
          Cir. 1981); sec. 1.183-2(b), Income Tax Regs.                               
               We consider each of Rance’s and Zane’s activities                      
          separately, beginning with petitioner Rance’s activity involving            
          cutting horses.                                                             





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