Petitioners' attempt to charter My Toy was their first attempt at
chartering a fishing boat. Disregarding their negative
experience with the sailboat, they sought out no independent
expertise in the fishing boat chartering business. We also note
that petitioners had experienced losses with respect to the Tahoe
property. See discussion infra.
(6) The taxpayer's history of income and loss with respect
to the activity, and (7) the amount of occasional profits, if
any, that are earned. A record of substantial losses over many
years and the unlikelihood of achieving a profitable operation
are important factors bearing on the taxpayer's intention.
Cannon v. Commissioner, 949 F.2d 345, 352 (10th Cir. 1991), affg.
T.C. Memo. 1990-148; Golanty v. Commissioner, 72 T.C. at 426-427.
Petitioners' chartering activities generated substantial losses,
mostly attributable to depreciation, from 1985 through 1987.
Petitioners used these losses to offset taxable income from other
sources.
(8) The financial status of the taxpayer. During the period
petitioners owned and attempted to charter the fishing boat, they
received ample income from their full-time medical practice.
Because of the relatively large amount of income from their
medical practices, petitioners attempted to obtain tax benefits
by claiming the losses generated by the chartering activities.
(9) The presence of elements of personal pleasure or
recreation. Unlike the sailboat, petitioners did not have any
interest in or use of the fishing boat.
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