Derril O. Lamb, Jr. and Joyce Lamb - Page 16

                                                  -16-                                                    
            fisherman’s success on the sea, deteriorated due to his diabetic                              
            retinopathy.                                                                                  

                  (8)  The Financial Status of the Taxpayer                                               

                  The regulations provide that “Substantial income from                                   
            sources other than the activity (particularly if the losses from                              
            the activity generate substantial tax benefits) may indicate that                             
            the activity is not engaged in for profit especially if there are                             
            personal or recreational elements involved.”  Sec. 1.183-2(b)(8),                             
            Income Tax Regs.  On their 1990 Federal income tax return,                                    
            petitioners reported wages from Marriner Lumber and Oregon Bow                                
            totaling $53,074, interest income of $29,653, dividend income of                              
            $686, capital gains of $64,583, and miscellaneous income of                                   
            $4,539.  On their 1991 return, petitioners reported wages from                                
            Marriner Lumber of $31,772, interest income of $29,454, dividend                              
            income of $557, taxable refunds of State and local income taxes                               
            totaling $1,708, capital gains of $23,398, Schedule E income of                               
            $44,633, and miscellaneous income of $5,331.  Petitioners clearly                             
            received a tax benefit from the losses generated by Mr. Lamb’s                                
            tuna fishing activity.                                                                        

                  (9)  The Presence of Elements of Personal Pleasure or                                   
            Recreation                                                                                    

                  The “fact that the taxpayer derives personal pleasure from                              
            engaging in the activity is not sufficient to cause the activity                              





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