solely on their accountant, a friend and part of their extended
family.
Following in that pattern, petitioners traveled to Florida
to purchase the fishing boat and again when the charter company
failed. Other than those two trips, petitioners were oblivious
to the fishing boat activity. After 2 years without supervision
of the Winterses, petitioners found out from a third party that
their fishing boat was in poor condition and was not being
properly managed. Shortly thereafter, petitioners discontinued
mortgage payments, and the boat was seized.
(4) Expectation that assets used in the activity may
appreciate in value. Mr. Hilliard was of the view that boats
normally do not appreciate in value. The circumstances here
reflect that petitioners focused primarily on the tax benefits
(deductions) and the sheltering of their medical practice income.
In this regard, there is some indication in the materials
concerning the foreclosure of the maritime mortgage that
petitioners may have overpaid for the fishing boat. In that
regard, the purchase price was nearly $200,000, and the fishing
boat was sold less than 3 years later, without much intervening
use, for $50,000.
(5) The success of the taxpayer in carrying on other similar
or dissimilar activities. Petitioners had several years of
experience attempting to charter the sailboat. Those efforts
resulted in repeated and relatively large losses. Despite those
experiences, petitioners relied on their accountant, Mr. Brazil.
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