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alcoholic beverages aboard the sailboat. Although it is not
entirely clear from the record, it appears that petitioners
initially charged $250 per day to charter the Malaguena.
Charter boat services conducted in the manner in which
petitioners conducted their activity are known as bare boat
charters, and boats used for such purposes must be registered
with the U.S. Coast Guard. Boats which have not been
manufactured in the United States are not eligible to be
registered for such usage. The Malaguena was not manufactured in
the United States, nor was it registered with the U.S. Coast
Guard.
Apparently, Hans Hammann enjoyed sailing a great deal. He
was an experienced sailor and had been involved in various
activities involving sailing prior to the years in issue. As
best as can be determined from the record, he spent a significant
amount of time on the Malaguena. He wanted to take his son,
Andreas, for a sail the day after the child was born, but Cheryl
Hammann objected. He had to wait until Andreas was 3 days old to
do so.
For the years 1983, 1984, and 1985, petitioners reported on
Schedules C4 the following amounts of income and expenses
attributable to the operation of the Malaguena:
4The Schedules C identified Hans Hammann as the proprietor
of the charter boat service.
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