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1991. Around the same time, petitioners chose to terminate the
activity.
Petitioners spent several months in 1990 and 1991 addressing
issues with Kanter Yachts. We find that petitioners were
genuinely motivated by the desire to maintain their investment in
the yachts. On the other hand, we think that the minimal amount
of time petitioners spent in this activity does not support their
contention that they were engaged in this activity with a profit
objective in 1990 or 1991.
Expectations That Assets Used in the Activity May Appreciate
in Value. Petitioners did not present any evidence that the
yachts used in their activity would appreciate in value or that
the yachts were obtained for such purposes. In fact, petitioners
testified that the market for yachts was depressed in 1991.
Petitioners assert that this was the reason they did not dispose
of Trinity after their corporation, Lucid Cruising, was dissolved
in 1991.
The Success of the Taxpayer in Carrying On Other Similar or
Dissimilar Activities. Petitioners have not presented any
evidence that they had been previously engaged in activities
consisting of selling yacht equipment or yachts themselves. Sec.
1.183-2(b)(5), Income Tax Regs. Petitioners, however, were
financially successful in their business professions.
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