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Our analysis of the nine factors reveals that, overall,
Rance did not enter into or continue his cutting horse activity
with the requisite profit motive. We hold that respondent’s
determination disallowing the losses from that activity was not
in error.
Zane’s Staffordshire Bull Terrier Activity
Zane became interested in dogs when he was 12 years old,
after attending a dog show. Thereafter, his parents bought him
his first Staffordshire Bull Terrier.7 He became involved in dog
showing, breeding, and judging, and by 1985, at age 22, he served
as the youngest championship show judge in recent history.
During the years in issue he attended many dog shows and owned or
coowned as many as 30 to 40 dogs. Most of the dogs lived with
their handlers or with his coowners.
Zane believed that showing or judging dogs at shows did not
normally generate revenue, but breeding and selling puppies could
have potential for revenue. More revenue would result if his
dogs showed well and/or won medals at a show. Zane has semen
stored from two of his dogs. He testified that a breeding
typically requires two straws of semen and he could charge around
$2,000 per breeding. He estimated that the 80 straws he had at
7 Ultimately, Zane became a noted expert in American and
Staffordshire Bull Terriers.
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