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willingness to follow expert advice may also indicate a profit
objective. Dworshak v. Commissioner, T.C. Memo. 2004-249.
Petitioner has been involved with basketball since he was a
teenager. Petitioner knows of one person that has been hired by
an athletic apparel company after running a youth basketball
school. In addition, one of petitioner’s best friends, a former
professional basketball player, works as a talent scout for an
athletic shoe company and teaches basketball skills. While
petitioner clearly possesses a personal knowledge about the
business of basketball, his knowledge does not extend to the
economics of running a basketball school.
Petitioner testified that he has neither business experience
nor experience in coaching youth basketball. Petitioner
testified that he began his school only after seeing his friend,
a former professional basketball player, garner a highly paid
position with an athletic shoe company after sponsoring a youth
basketball team.
Based on the record, we conclude that although petitioner
does have a notable background in basketball–-both as a player
and as a referee–-he was not an expert in running a basketball
school, and he did not seek out expert advice regarding the
economic realities of running such an endeavor. The fact that
petitioner’s inspiration for starting his basketball school was
his friend who was a former professional basketball player
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