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activity for a number of years and never recovered anything, then
respondent's argument might be more persuasive. A series of
losses, if not explainable, may be indicative that the activity
is not being engaged in for profit. Sec. 1.183-2(b)(6), Income
Tax Regs. However, in the instant case, petitioner entered into
the gold mining and treasure hunting activity for 1 year and
after not recovering anything of value terminated his
relationship with International Recoveries. Petitioner was not
willing to continue to suffer substantial losses in a venture
that could not be successful; this indicates a profit motive.
Furthermore, while petitioner did have substantial income
and net worth, we do not find that this factor indicates that
this activity was not engaged in for profit. This activity was
not a tax shelter. Cf. Dastgir v. Commissioner, T.C. Memo. 1996-
169. Petitioner was able to use the full amount of the losses to
offset other income; however, this was clearly not the motivating
factor behind this investment. It is unconvincing to argue that
petitioner would spend $1 with the objective of saving a portion
of that dollar on taxes. “As long as tax rates are less than 100
percent, there is no 'benefit' in losing money.” Engdahl v.
Commissioner, 72 T.C. 659, 670 (1979). Petitioner in this case
incurred losses the old fashioned way--he spent money.
After review of the entire record, we conclude that the
treasure hunting activity was not designed to generate tax
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