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EPS recyclers. It is peculiar that, although petitioner had yet
to make a profit from his purchase of a Sentinel EPE recycler, he
nevertheless continued to purchase additional, more expensive
recyclers, more than doubling his investment.
Second, petitioner has presented no evidence that he made a
serious effort to monitor his investment in the Sentinel
recyclers. At trial, petitioner could not recall the names of
the companies with which he placed his machines.
Third, petitioner did not know the whereabouts of his
recyclers at the time of trial, stating that he had "abandoned"
the recyclers because PI failed to maintain them. Petitioner
testified that he did not profit from his recyclers because of
continual repair problems and PI's failure to maintain and repair
the machines as agreed. It would seem to us that a $4,662,667
investment would warrant repair and maintenance, even if such
repairs were not performed by PI as initially agreed.
Taking all of the above factors into consideration, we think
it is more likely than not that petitioner purchased the Sentinel
recyclers in an effort to generate tax benefits rather than to
make a profit.9
9 Here we are reminded that petitioner learned about the
Sentinel recyclers after contacting Miller in an effort to locate
equipment that would enable petitioner to take advantage of tax
benefits.
Although not directly germane to our conclusion set forth in
the text, supra, we nevertheless note that petitioner has
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