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several weeks after the Alameda Boat show in September 1988.
That was when Brendan began experiencing problems which sidelined
petitioners' plans. Moreover, petitioners could not recall their
advertising budget. In comparison, Kanter Yachts' annual
advertising budget ranged from $51,000 to $74,000. In 1990 and
1991, petitioners did not pursue any of the 300 visitors to their
yacht from the Seattle and the Alameda boat shows.
Finally, the record demonstrates that petitioners did not
objectively treat Brendan or Trinity as business assets.
Petitioners used the yachts for personal sailing. In this
regard, Brendan was not commercially insured. After the
dissolution of petitioners' corporation, Lucid Cruising, they
retained Trinity and used it for extensive personal sailing.
The Expertise of the Taxpayer or His Advisers. Petitioners
were experienced sailors, and petitioner husband had experience
maintaining yachts. However, petitioners had no experience with
selling yachts or sailboat equipment.
Time and Effort Expended by the Taxpayer in Carrying On the
Activity. Petitioners spent minimal time carrying out the
activity in 1990 and 1991. The fact that a taxpayer devotes
little time to the activity may indicate a lack of profit motive.
Sec. 1.183-2(b)(3), Income Tax Regs. Here, petitioners did not
actively promote or advocate their yacht-related activity between
September 1988 through 1991. Also, petitioner husband worked
full-time as a plastic surgeon until his retirement in October
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