B. Albert and Betty M. Holowinski - Page 8

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          financial status of the taxpayer; and (9) elements of personal              
          pleasure or recreation.  No single factor, nor a simple numerical           
          majority of factors, is necessarily controlling.  Cannon v.                 
          Commissioner, 949 F.2d 345, 350 (10th Cir. 1991), affg. T.C.                
          Memo. 1990-148.                                                             
               Several factors weigh slightly in petitioners' favor.                  
          First, petitioners generally carried on the activity in a                   
          businesslike manner.  They maintained accurate inventory records,           
          obtained a Colorado business license, registered with the State             
          to collect sales tax, advertised in antique newsletters although            
          in a limited fashion, and rented a showcase at the Colorado                 
          Antique Gallery.                                                            
               On the other hand, some factors weigh heavily in favor of              
          respondent.  Petitioners reported no profits, but rather                    
          substantial losses for the years in issue.  See Golanty v.                  
          Commissioner, 72 T.C. 411, 427 (1979), affd. without published              
          opinion 647 F.2d 170 (9th Cir. 1981).  While losses in the early            
          years of an activity may not be indicative of the absence of a              
          profit motive, several facts convince us otherwise in this case.            
          First, petitioners reported losses of more than eight times the             
          total sales reported for the years in issue (total sales).                  
          Petitioners incurred traveling expenses in excess of six times              
          the total sales.  Considering only cost of goods sold and direct            
          selling expenses (commission expenses and the $50 a month                   
          showcase rental) petitioners posted a cumulative loss for the               

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