- 10 -
amounts of these profits. We find petitioner's testimony with
respect thereto, which was the only evidence that petitioner
presented as to the amounts and years of the early years’
profits, to be inconsistent and vague. For example, petitioner
testified that his store earned approximately $225,000 to
$275,000 in the early 1960's. He also testified, however, that:
(1) These earnings were gross receipts, rather than net profits,
(2) he did not know the store’s net profit for any of its years,
and (3) with the exception of 1962 through 1965, he did not know
the specific years in which the store earned a profit.
Accordingly, we are unable to conclude that petitioner's store
profited in each of its years from 1962 until 1979, although
petitioner’s testimony established that the store earned a profit
from 1962 through 1965, and his testimony indicates that the
store may have earned a profit in other years prior to 1980.
In our view, the profits made by the store from 1962 through
1965 have only limited weight in determining whether petitioner
had a profit motive during the subject years, over 20 years
later. It is clear that the store sustained consistent losses
beginning at least as early as 1980. Petitioner offered no
evidence at trial, other than his self-serving testimony, to
support his assertion that he anticipated his pattern of losses
would change. He offered no analysis of when he anticipated the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011