17 that petitioner suffered 7 years of losses up to and including the taxable year 1990. Petitioner had no business plan to address the accumulating and expected losses. While it is likely that petitioner entered into the metal mining and refining activity with a profit objective, the extended record of losses without abatement devalued the activity into one that provided an offset to petitioners’ other income. 2. The Expertise of the Taxpayer and His Advisers Petitioner developed, since childhood, the technical knowledge, skill, and interest in the metal mining and refining field. Petitioner also observed the proprietor of Valley Smelting, a similar concern allegedly also involved in a similar activity. Finally, by 1980, petitioner had a competitor who was also recovering mercury from scrap batteries. Petitioner did not demonstrate how he utilized the information gathered to address any business decisions confronting his activity such as the rates of continuing losses. Although petitioner’s wife was a controller possessing financial skills to develop and operate a business plan, the record does not demonstrate that her skills were utilized. 3. The Time and Effort Expended by the Taxpayer in Carrying On the Activity Petitioner spent a minimal amount of time carrying out the activity in 1990. He spent approximately 1 month on the production of income in 1990. He contends, however, that thePage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011