records or bank accounts were maintained. No action was taken in
later years to address the lack of rental in earlier years.
(2) The expertise of the taxpayer or his advisers.
Petitioners were not shown to have had experience or to rely on
others with expertise regarding their Tahoe rental activity.
(3) Time and effort expended by the taxpayer in carrying on
the activity. Petitioners practice medicine on a full-time
basis. They spent little time with the rental activity, other
than by Mr. Hilliard's making some repairs during petitioners'
occasional trips to the property.
(4) Expectation that assets used in the activity may
appreciate in value. Mr. Hilliard purchased the property in
connection with a foreclosure and sold the property for a gain.
No analysis was conducted with respect to the potential for
profit from the rental of the property or with respect to the
potential for gain from any appreciation of the Tahoe property.
(5) The success of the taxpayer in carrying on other similar
or dissimilar activities. Petitioners experienced losses from
their Tahoe rental activity for several years prior to the years
in question, and, in addition, they had experienced losses
regarding the sailboat chartering activities.
(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, coupled with little potential for profit are important
factors bearing on the taxpayer's intention. Cannon v.
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