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Ballard Marine hired Walter Schintzius (Schintzius), a yacht
broker, for advice on, among other things, the operating
characteristics of the yacht, its acceptability as a charter
boat, and its residual value. Schintzius did not advise
petitioner on the day-to-day operations or economics of a yacht
chartering business.
Ballard Marine obtained insurance against various risks
associated with operating the yacht.
On January 26, 1987, the U.S. Coast Guard issued a
certificate of documentation with respect to the yacht, which
shows that the vessel was then documented for pleasure use.
Florida
In late October 1986, Ballard Marine hired Captain George
Newman (Newman), owner of Newman Marine Services (Newman Marine),
to move the yacht from Annapolis, Maryland, to the Lighthouse
Point Yacht Club (Lighthouse Point), Lighthouse Point, Florida.
In 1987, petitioner purchased land in Lighthouse Point,
Florida, on which he eventually built a house for his own use.
Ballard Marine also hired Newman to oversee both the
outfitting of the yacht and its maintenance and repair while it
was in Florida. Newman was not engaged in the charter business
in 1986 or 1987.
On December 3, 1986, Ballard Marine moved the yacht to the
Boca Raton Resort and Club, which is in southern Florida, and
which was the site of a meeting of the Securities Industry
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