Derril O. Lamb, Jr. and Joyce Lamb - Page 11

            carrying on the activity; (4) the expectation that assets used in                             
            the activity may appreciate in value; (5) the success of the                                  
            taxpayer in carrying on other similar or dissimilar activities;                               
            (6) the taxpayer’s history of income or losses with respect to                                
            the activity; (7) the amount of occasional profits, if any, which                             
            are earned; (8) the financial status of the taxpayer; and (9) the                             
            presence of elements of personal pleasure or recreation.  Sec.                                
            1.183-2(b), Income Tax Regs.                                                                  

                  (1)  Manner in Which the Taxpayer Carries on the Activity                               

                  Respondent argues that Mr. Lamb did not maintain adequate                               
            books and records for his tuna fishing activity.  We disagree.                                
            Mr. Lamb established a separate bank account (the Lu-Joy account)                             
            at Casco Northern Bank in Bowdoinham, Maine, which enabled him to                             
            segregate the income and expenses from his tuna fishing                                       
            activity.4  In addition, Mr. Lamb maintained a log recording the                              
            weather and tide conditions on the days that he fished, as well                               
            as the loran coordinates of each tuna that Mr. Lamb spotted so                                
            that he could return to that location in the future to fish for                               
                  Respondent also contends that Mr. Lamb did not conduct his                              
            tuna fishing activity in a businesslike manner, because Mr. Lamb                              

                  4We note that respondent has not argued that Mr. Lamb has                               
            failed to substantiate the amount and nature of any of the                                    
            expenses he claimed in connection with his tuna fishing activity.                             

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