Anthony Ranciato and Lucille Ranciato v. Commissioner of Internal Revenue

COFFIN, Senior Circuit Judge:

Anthony and Lucille Raneiato appeal a decision of the United States Tax Court finding that their family pet store was not an activity “engaged in for profit” and that, consequently, they could not deduct the store’s losses from unrelated income. See 26 U.S.C. § 183. Disallowing the deductions resulted in an assessment against the Ranciatos of nearly $86,000 in additional taxes, penalties and interest for the years 1985, 1986 and 1987. 1 Because it appears that the Tax Court gave undue weight to the sloppy operation of the business, while failing to consider other…