- 19 -
Seattle and Alameda boat shows in 1988 and over 300 people signed
the visitors' log, there were no sales. Kanter testified that
his company, Kanter Yachts, relies primarily on advertising to
sell yachts, and that it had not sold a boat in any of the 12
boat shows they attended from 1987 through 1991.
Petitioners' stated intention to make a profit did not
comport with the fact that Lucid Cruising had nearly half a
million dollars of accumulated costs by 1991. If petitioners had
sold the three yachts projected, per year, for a commission of
$15,000 Canadian on each yacht, it would have taken nearly 11
years of consistent sales merely to recover their costs already
incurred.5
Other than the self-serving statements in the corporate
minutes, there is nothing in the record showing that petitioners
were authorized dealers or representatives of boating and/or
boating equipment manufacturers. The record does not reflect any
sales of boating equipment that would have ameliorated the length
of time necessary to break even.
Petitioners' marketing and advertising activities were
minimal. Although petitioners advertised in various magazines,
they did not promote their activities between September 1988
through July 1991. Petitioners ceased their selling activity
5 Five hundred thousand dollars of capitalization divided by
$15,000 commission per yacht multiplied by three yachts per year
equals nearly 11 years. Although the parity between U.S. and
Canadian currency varied during this period, we provide these
figures for illustrative purposes only.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011