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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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