Accordingly, we hold that the attempt to charter the
sailboat was an activity "not engaged in for profit" within the
meaning of section 183. Hence, it is not necessary to discuss
the section 1366(d)(1) loss requirements regarding S
corporations.
B. Fishing Boat Activity
In 1985, Mr. Hilliard became aware of a boat investment
opportunity through his accountant, Nathaniel Brazil. Mr.
Brazil, who was married to Mr. Hilliard's cousin, was also a
friend and has been petitioners' accountant since 1968. Pursuant
to Mr. Brazil's proposal, petitioners were to purchase a boat and
place it in a charter activity in Florida using Inter Island
Charters, Inc.
Petitioners did not do any independent investigation and
relied on Mr. Brazil for investigation of the fishing boat
investment. There is no indication that Mr. Brazil traveled to
Florida to investigate the fishing boat. On Mr. Brazil's advice,
petitioners agreed to a $199,894 purchase price for a new 1985
Sport Strike Fisherman boat named "My Toy" (fishing boat) during
March or April 1985; the boat was to be docked in Fort
Lauderdale, Florida. Mr. Hilliard did not know whether Mr.
Brazil had any experience concerning investments in boat
chartering.
Early in March 1985, Mr. Hilliard executed a purchase order
for a fishing boat that he had not seen prior to making the
order. Mr. Brazil had arranged for petitioners to meet with the
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