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Ranciato v. Commissioner, 52 F.3d at 27 n.6. Petitioner's mother
generally spent 35 to 40 hours per week at the store.
We agree with the Court of Appeals that the time spent by a
third party in a taxpayer's activity may be relevant in
determining the taxpayer's intent with respect thereto. We do
not believe, however, that the instant case is such a case. We
think that petitioner “employed” his mother at the store to
provide her with a pleasurable pastime in a family project that
was operated without regard for profitability. Given the fact
that petitioner’s mother operated the store on a full-time basis
for at least 26 years without pay (i.e., from 1962 through 1987),
we can only assume that she reaped personal pleasure from her
full-time efforts. See Ballich v. Commissioner, T.C. Memo.
1978-497. We also believe that petitioner derived enjoyment and
satisfaction from the knowledge that his mother was “gainfully
employed” in a valued family project regardless of whether the
store operated at a profit.
This factor supports respondent's determination.
4. Expectation That the Assets Will Appreciate in Value
We consider the expectation that assets used in petitioner's
store would appreciate in value. Sec. 1.183-2(b)(4), Income Tax
Regs. The term "profit" includes the appreciation in the value
of assets used in an activity. Id.
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