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Ralph Louis Vitale, Jr. - Page 25

Legal Research Home > US Tax Court > 1999 > Ralph Louis Vitale, Jr. - Page 25

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               The last factor looks to elements of personal pleasure or              
          recreation.  It is obvious that petitioner enjoyed writing and              
          derived personal satisfaction in helping prostitutes seek a new             
          way of life.  Nevertheless, "the fact that the taxpayer derives             
          personal pleasure from engaging in the activity is not sufficient           
          to cause the activity to be classified as not engaged in for                
          profit if the activity is in fact engaged in for profit as                  
          evidenced by other factors".  Sec. 1.183-2(b)(9), Income Tax                
          Regs.                                                                       
               Petitioner has succeeded in proving that he engaged in his             
          writing activity with a profit objective.  There are admittedly             
          some factors in this case which indicate the absence of a profit            
          motive:  Petitioner has a history of losses, he did not seek any            
          expert advice, and, arguably, there is a recreational element in            
          his writing.  These factors, however, are outweighed by the facts           
          demonstrating that petitioner did engage in writing for profit.             
          And though his writing venture may have been speculative and his            
          expectation of profit unreasonable, that alone does not preclude            
          us from finding that petitioner was in the trade or business of             
          being an author during the years before us.                                 
               Respondent next asserts that, for 1993 and 1994, peti-                 
          tioner's claimed expenses were not ordinary and necessary                   

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