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expanding their already existing commercial banking activities,
and not preopening expenses of new businesses. On the other hand
in Hardy v. Commissioner, supra, this Court concluded that the
taxpayer’s intent to buy and thereafter to own and manage large
commercial hotel and motel properties was unrelated to the
taxpayer’s part-time work managing rental homes.
We believe that the situation in the instant case is more
like a rental real estate manager beginning a new business as a
manager and owner of hotels and motels, than it is like
commercial banks expanding into the credit card industry. Laney
worked as a computer programming consultant. In or around 1977
Laney began to do computer consulting for several pharmaceutical
companies. Laney designed integrated computer systems for these
companies that could communicate with other computer systems.
His work for these companies was performed either at their
facilities or at his home office. Laney’s consulting work
consisted of providing a service; it did not include rental of
space or ownership of real property. In the case of R.K.,
however, Laney’s plan was to profit from the rental of cage
space. He expected to offer his consulting services to the R.K.
researching entities, but none of those entities would be
required to use his consulting services.
Petitioners called Clement C. Darrow II (hereinafter
sometimes referred to as Darrow), as an expert witness, both to
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