Hans H. and Cheryl E. Hammann - Page 17

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          respondent also denied all investment tax credits claimed by                
          petitioners with respect to certain assets used in the activity.            
               We begin with an examination of whether Hans Hammann                   
          conducted the charter boat service with the intent to make a                
          profit.  The test for determining whether a taxpayer conducted an           
          activity for profit is whether he or she entered into, or                   
          continued, the activity with the actual or honest objective of              
          making a profit.  Dreicer v. Commissioner, 78 T.C. 642, 644-645             
          (1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983);               
          sec. 1.183-2(a), Income Tax Regs.  The taxpayer's expectation of            
          profit need not be reasonable, but the profit objective must be             
          bona fide, as judged by all facts and circumstances.  Dreicer v.            
          Commissioner, supra at 645; Golanty v. Commissioner, 72 T.C. 411,           
          426 (1979), affd. without published opinion 647 F.2d 170 (9th               
          Cir. 1981); Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965),             
          affd. 379 F.2d 252 (2d Cir. 1967).                                          
               Whether Hans Hammann engaged in the charter boat service               
          with the requisite profit objective must be determined on a year-           
          by-year basis from the facts and circumstances of the case.                 
          Golanty v. Commissioner, supra at 426; sec. 1.183-2(a) and (b),             
          Income Tax Regs.  More weight is given to objective facts than to           
          subjective statements of intent.  Sec. 1.183-2(a), Income Tax               
          Regs.  Petitioners bear the burden of proving that Hans Hammann             
          engaged in the charter boat service with the actual and honest              






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