Steven Carl Akerson - Page 9

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            resort activity's income and expenses.  He printed brochures to                              
            advertise the resort, and he offered rooms for rent.  He expended                            
            energy and minimized costs by doing all of the repair work                                   
            himself.  He hired Alvarado to provide legal services and to                                 
            assist in the maintenance of the resort when petitioner was not                              
            present at the property.  Petitioner was experienced in operating                            
            sailboats, so he bought sailboats to attract guests to the                                   
            resort.  Moreover, it was not unreasonable to expect that the                                
            value of Playa de los Vivos would increase, given the property's                             
            location and the promise of future infrastructure development.                               
                  While the losses may have been greater than what they would                            
            have been if petitioner had not tried to convert the resort                                  
            activity to solar power, that does not mean he was not trying to                             
            operate it for profit.  Petitioner credibly testified that he had                            
            a profit motive when he bought Playa de los Vivos and that he                                
            continues to have one today.  Generally, a taxpayer's                                        
            unimpeached, competent, and relevant testimony "may not be                                   
            arbitrarily discredited and disregarded" by the Court.  Loesch &                             
            Green Const. Co. v. Commissioner, 211 F.2d 210, 212 (6th Cir.                                
            1954).  Respondent did not refute petitioner's testimony, and we                             
            believe petitioner.                                                                          
                  Based on all the facts and circumstances, we conclude that                             
            petitioner had a profit motive in operating his resort activity.                             








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