Frank R. Courbois - Page 15

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                of the end of 1990, petitioner had received total rental                                 
                income from the Cloudia of $3,305 and had made cash                                      
                expenditures amounting to $33,751.  Thus, as of the end                                  
                of 1990, petitioner had made net out-of-pocket expenditures                              
                of $30,446 on the Cloudia.  That amount, plus the original                               
                cost of the Cloudia, $110,000, put petitioner’s total                                    
                investment in the sailboat, as of 1990, at $140,446.                                     
                Petitioner also testified that at the time he purchased                                  
                the Cloudia for $110,000, it would have cost him approx-                                 
                imately $60,000 to restore the boat.  Thus, considering                                  
                petitioner's testimony, we cannot find that petitioner has                               
                shown that he could profit from appreciation in the value                                
                of the Cloudia.  See Cannon v. Commissioner, 949 F.2d 345,                               
                352 (10th Cir. 1991) (a record of substantial losses over                                
                many years and the unlikelihood of achieving a profitable                                
                operation are important factors bearing on a taxpayer's                                  
                intention), affg. T.C. Memo. 1990-148; Antonides v.                                      
                Commissioner, 91 T.C. 686, 696-697 (1988) (“any such                                     
                appreciation would have allowed petitioners to do little                                 
                more than break even” and “Chartering a yacht to others in                               
                order to afford to keep it through tax savings for one’s                                 
                personal enjoyment is not the same as having a profit                                    
                objective”), affd. 893 F.2d 656 (4th Cir. 1990); see also                                







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