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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
Marine.
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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