Prieto

MEMORANDUM *

Victor and Marion Prieto engaged in a horse activity from 1991 to 2000 that involved buying horses to train and resell. The horse activity sustained losses, and the Prietos deducted these losses from their income in their individual tax returns each year. The Commissioner of Internal Revenue sent the Prietos a Notice of Deficiency in 1999 notifying them that they were liable for unpaid income taxes for tax years 1994 and 1995 because the horse activity was not engaged in for profit, and therefore, losses from the activity were not deductible for those years. The Prietos filed a petition in the tax court challenging the Commissioner’s determination. The Tax Court held a trial and entered a final decision upholding the Commissioner’s determination that the horse activity was not engaged in for profit in tax years 1994 and 1995. The Prietos appeal this decision. We have jurisdiction, 26 U.S.C. § 7482 , and we affirm.

The issue of whether the Prietos engaged in the horse activity with the primary intent of making a profit is a factual question that is reviewed for clear error. Custom Chrome, Inc. v. Comm’r, 217 F.3d 1117,1121 (9th Cir.2000). Under the clear error…