-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.
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