Steven F. and Kathryn A. Dawson - Page 6

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          is dispositive.  Golanty v. Commissioner, supra at 426.  The nine           
          factors are:  (1) The manner in which the taxpayer carries on the           
          activity; (2) the expertise of the taxpayer or his advisors; (3)            
          the time and effort expended by the taxpayer in carrying on the             
          activity; (4) the expectation that the assets used in the                   
          activity may appreciate in value; (5) the success of the taxpayer           
          in carrying on other similar or dissimilar activities; (6) the              
          taxpayer's history of income or losses with respect to the                  
          activity; (7) the amount of occasional profits, if any, that are            
          earned; (8) the financial status of the taxpayer; and (9) the               
          elements of personal pleasure or recreation involved in the                 
          activity.  Sec. 1.183-2(b), Income Tax Regs.                                
               After considering the evidence in this case, we conclude               
          that petitioners engaged in the Activity with the actual and                
          honest objective of making a profit.                                        
          I.  Businesslike Manner                                                     
               The fact that a taxpayer carries on an activity in a                   
          businesslike manner and maintains complete and accurate books and           
          records may indicate that the activity was carried on for profit.           
          Sec. 1.183-2(b)(1), Income Tax Regs.  Further, abandonment of               
          unprofitable methods in a manner consistent with an intent to               
          improve profitability may indicate a profit objective.  Id.                 
               Several factors indicate that petitioners carried on the               
          Activity in a businesslike manner.  Mrs. Dawson kept books and              
          records for the business.  Petitioners also maintained a separate           

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