- 11 -
Mr. Denham's expert report and testimony, the master video games
at issue had little or no value.
Mr. Denham stated in his report that the games were not of
commercial quality. The play of the games is too slow, the sound
effects and graphics are poor, and the challenge is minimal and
simplistic. In short, the games were not manufactured with the
intent of marketing them commercially. In fact, as Mr. Denham
states, the game packages did not contain any trademarks or any
other evidence indicating that the games were protected from
being copied by other game producers. We find that the absence
of a trademark implies that the producer or owner placed no value
on the games; any serious producer would have his or her product
protected. Century obtained the masters from General Masters
Corp. Mr. Denham found that General Masters primarily developed
video games for the purpose of selling them for use in tax
shelters.
Based upon the facts and circumstances of the instant case,
we conclude that petitioner has failed in his burden of proving
that he participated in the Century Concepts leasing program with
an actual and honest objective of making a profit. Instead, we
find that petitioner engaged in the leasing program primarily, if
not exclusively, to obtain tax deductions and credits, thereby
reducing the tax he would otherwise owe on income from other
sources. Accordingly, respondent is sustained on this issue.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011