The U.S. Tax Court ruled that a taxpayer’s horse breeding enterprise wasn’t engaged in for profit. Therefore, the related deductions and net operating losses couldn’t be claimed. The taxpayer’s farm produces Standardbred horses, a breed used in competitive harness racing. The court found the taxpayer was intent on having a high-quality horse operation, spent significant amounts of money on it and had voluminous records. However, the records had large gaps or inconsistencies, the taxpayer had an out-of-date business plan, the enterprise was “insensitive to costs,” and the activity blended business with personal elements. Thus, it wasn’t conducted in a businesslike manner. (TC Memo 2021-139)