Charles A. Ballard - Page 17

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          house.  In the summer, he kept it on the Chesapeake Bay, which is           
          only 2-1/2 hours from his home in Philadelphia.  The tax cost of            
          paying Ballard Marine for his personal use seems to us a small              
          cost for petitioner to have paid if it would have helped him                
          establish the bona fides of a profit objective.  We need not                
          determine what petitioner’s objective was in acquiring the yacht            
          (to resolve this case, it is sufficient that we determine only              
          whether it was to earn a profit).  Nevertheless, we believe that            
          petitioner’s objective in acquiring the yacht was to have it                
          available for his personal use.  As we have said, we believe that           
          petitioner would have liked to make a profit with the yacht.                
          Nevertheless, we do not believe that that was his objective in              
          causing Ballard Marine to acquire and operate the yacht.  Cf.               
          Antonides v. Commissioner, 91 T.C. 686, 697 (1988), affd. 893               
          F.2d 656 (4th Cir. 1990) (“Chartering a yacht to others in order            
          to afford to keep it through tax savings for one’s personal                 
          enjoyment is not the same as having a profit objective.”).                  
               D.  Conclusion                                                         
               Ballard Marine’s activity of holding the yacht for charter             
          was not an activity engaged in for profit within the meaning of             
          section 183(c).  Accordingly, Ballard Marine’s expenses                     
          attributable to that activity are allowable as deductions only to           
          the extent provided for in section 183(b).                                  

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