- 17 -
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).
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011