-14- Petitioner contends that he did everything he could “to guarantee this was [a] legitimate investment.” Although petitioner did request a law firm to review literature from FoodSource, he did nothing else. He did not seek any independent verification of the information FoodSource provided. He did not inquire as to the actual cost of manufacturing the container, nor did he attempt to evaluate the container’s fair market value. Based on the record before us, we are not persuaded that petitioner had an actual and honest profit objective with respect to his involvement in the FoodSource program. See Sutton v. Commissioner, 84 T.C. 210, 222- 226 (1985), affd. per curiam 788 F.2d 695 (11th Cir. 1986) We do not believe that petitioner invested $26,000, in a year when petitioners’ income was approximately $35,000, for the purpose of generating an unknown and unsubstantiated amount of future income. Clearly, of considerable if not primary importance to petitioner in his participation in the FoodSource program was the immediate tax advantages he could achieve and the refunds that could be (and were) claimed on petitioners’ amended returns for prior years. Petitioner had no background or experience in the transportation of produce, nor did he exhibit any desire to become involved with it. He did not follow up on his investment to determine whether the container was completed or placed in an income-producing use. He never had control over the container.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011