Steven Carl Akerson - Page 5

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            External Factors Affecting Playa de los Vivos                                                
                  The tourist industry in Costa Rica was adversely affected by                           
            international tension toward the end of 1990.  In addition,                                  
            although the Costa Rican Government promised to pave the roads                               
            surrounding Playa de los Vivos and begin a new ferry service, by                             
            as late as 1995, neither had been done, so it was hard for                                   
            tourists to reach the property.  Moreover, although the phone                                
            company promised telephone service in 1988, Playa de los Vivos                               
            did not have telephone service until 1996.                                                   
            Solar Equipment                                                                              
                  In 1990, petitioner bought a solar powered ozone generator                             
            to purify the water in the resort's swimming pool without the use                            
            of chemicals, and a battery powered cart that he converted to                                
            solar power and used at the resort.  An advertising brochure                                 
            describing Playa de los Vivos and the amenities available there                              
            suggests that the resort was made possible through solar                                     
            electronic technology and that petitioner's intent is to continue                            
            using such technology.                                                                       
                  Petitioner's first sale of solar electronic equipment in                               
            Costa Rica subsequent to his purchase of Playa de los Vivos was                              
            in 1992.                                                                                     
            Petitioner's Tax Returns                                                                     
                  Petitioner reported the results of the resort activity on                              
            Schedules C attached to his Federal income tax returns, Forms                                
            1040, for his taxable (calendar) years 1988 through 1995.  For                               




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