Frederick G. Harrison, Sr. and Estate of Catherine Harrison, Deceased - Page 16

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          no need for him to negotiate a higher percentage of profits plus            
          insist on reimbursement of out-of-pocket expenses before                    
          distribution of profits.  Petitioner's negotiations indicate a              
          profit motive.  See Gefen v. Commissioner, 87 T.C. 1471, 1498               
          (1986) (partner negotiating terms of partnership's transactions             
          to partnership's best advantage was a factor in deciding that               
          partnership was engaged in activity with the intention of making            
          a profit).                                                                  
               Petitioner was admittedly not an expert in the gold mining             
          and treasure hunting business.  However, we find that petitioner            
          did ally himself with experts sufficient to give this venture an            
          opportunity to be successful.  Although there were some                     
          inconsistencies between petitioner's testimony regarding Mr.                
          Tillman's experience and the summary sheet of Mr. Tillman's                 
          experience, we are convinced that petitioner was aware of Mr.               
          Tillman's credentials when making his decision to join                      
          International Recoveries in this joint venture.  Both petitioner            
          and Mr. Saldivar credibly testified that Mr. Tillman was in                 
          charge of the operations, and we are convinced that petitioner              
          reasonably believed that Mr. Tillman was an expert in salvage               
          operations.                                                                 
               Careful investigation of a potential business to insure the            
          best chance for profitability strongly indicates an objective to            
          engage in the activity for profit.  Sec. 1.183-2(b)(2), Income              






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