- 27 -
compared to prior years' expenses. This illustrates an obvious
effort by petitioner to reduce BRVC losses in a time of extreme
revenue shortages. It is apparent that petitioner's efforts
began to pay off when, in 1993, BRVC again generated gross
income. Although BRVC expenses remained relatively low, losses
were nevertheless sustained during 1993 and 1994. However, by
1998 BRVC began experiencing financial improvements as BRVC
reported gross income of $13,188 and a net profit of $32.9 This
pattern of income and losses, coupled with petitioner's actions
in response thereto, indicates that petitioner possessed a profit
motive in operating BRVC.
The seventh factor is the amount of occasional profits of
BRVC, if any. The record reflects that BRVC realized a profit in
only 2 years of operation, $2,000 in 1986 and $32 in 1998. A
minuscule loss of $29 was sustained in 1987. Admittedly, viewed
in the most favorable light these profits were sporadic and
small. This fact does not weigh in favor of a profit motive.
Nevertheless, in this case the Court considers that the
infrequency of net profits is not as significant as the pattern
of income and expenses. The fact that profits were small and
occasional does not outweigh the fact that, when the receipts of
9 The Court is puzzled by the omission of return
information for 1995 through 1997. Nevertheless, given the
income pattern in other years, the Court surmises that BRVC
experienced a steady increase in gross income between the years
1994 and 1998.
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