Charles A. Ballard - Page 16

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          the realization (even coupled with the willingness to act on that           
          realization) that, if sufficient revenues could be produced, a              
          profit could be earned.  Indeed, petitioner has failed to show us           
          that substantial charter revenue was realistic for Ballard                  
               Certain trappings of a profit objective are here:  Ballard             
          Marine was formed as a business corporation; it had advisers; it            
          kept certain records of its income and expenses; it did offer the           
          yacht out for charter; it did produce advertising brochures; and            
          it did deal with petitioner as an outsider (although at a                   
          40-percent discount).  Those trappings, however, are insufficient           
          to convince us of petitioner’s objective to earn a profit.                  
          Petitioner was the sole shareholder of Ballard Marine, so that              
          Ballard Marine’s policy of charging him for his use of the yacht            
          makes little sense except as a for-profit trapping, for tax                 
          purposes.  Indeed, although petitioner claims on brief that his             
          out-of-pocket costs were “far in excess of any tax benefits”, he            
          has failed to detail for us the facts that would prove that                 
          conclusion.  Clearly, Ballard Marine was unsuccessful in the                
          charter business.  Nevertheless, petitioner did not consider a              
          general reduction in prices to try and attract more business.               
               Finally, we are influenced by the fact that petitioner did             
          make personal use of the yacht.  He used it on weekends, when he            
          was free from work.  In the winter, he kept it in Florida, at               
          Lighthouse Point, where, in 1987, he purchased land to build a              

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