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Petitioner is a skilled mechanic and engineer. His long
hours of work on the drill rig, in the face of his inability to
find work for it, are attributable both to the profit that he
expected to earn from its operation and disposition and the
enjoyment he derived from working on the equipment, upgrading it,
and keeping it in a state of readiness.
Petitioner reported taxable income of $35,354 and a tax
liability of $7,774 on his Federal income tax return for 1985.
However, foreign tax credits arising from petitioner's foreign
source income from his work overseas reduced that liability to
zero. Petitioner reported no taxable income and a tax liability
of zero on each of his Federal income tax returns for the period
1986 through 1991.
8(...continued)
The largest decline in the spot price of crude oil occurred
in 1986, and the price never recovered during the relevant period
to 1984-85 levels.
Selected domestic prices per barrel follow:
Year Price
1984 average..................................$25.88
1985 average.................................. 24.09
1986 average.................................. 12.51
1987 average.................................. 15.40
1988 average.................................. 12.58
1989 average.................................. 15.86
1990 average.................................. 20.03
1991 average.................................. 16.54
Energy Information Administration/Historical Monthly Energy
Review 1973-1992, at 249.
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