area. The sailboat was infrequently chartered, and it was not
maintained. Berth fees paid directly to Captain George's were
not forwarded to the harbor master. After 1 year, Mr. Hilliard
moved the boat to a marina in Richmond, California, and,
thereafter, petitioners attempted to charter the sailboat
themselves. Mr. Hilliard had no prior experience in sailboat
chartering. Petitioners posted notices on bulletin boards in the
hospitals where they worked, placed a sign on the boat, and
otherwise relied on word of mouth to advertise their sailboat for
charter. The sailboat, while located at the Richmond marina, was
seldom chartered. Petitioners received little income, and it was
substantially less than their claimed expenses. Petitioners
ceased sailboat charter activity during 1987, but they retained
the sailboat for personal use. During the time petitioners were
attempting to charter the sailboat, they personally used the boat
about once a month during the summer. The boat was not used
during the winter.
(1) Manner in which the taxpayer carries on the activity.
Attempts to publicize or advertise the chartering activities were
not significant. Petitioners did not prepare a written business
plan prior to the sailboat purchase. No separate books and
records or separate bank accounts were maintained regarding the
sailboat.
(2) The expertise of the taxpayer or his advisers. Although
Mr. Hilliard was an experienced sailor and sailed the boat during
the summer, he had no experience with chartering. Petitioners
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