- 20 - maintenance supply business, a rental real estate business, and a dental practice. We accept petitioners' characterization of Dr. DeMattia as an astute businessman. However, given his prior experience in business dealings, we find that the manner in which he carried out this activity makes it less likely that he entered into the activity with a profit motive. This factor supports respondent's determinations. 6. An Activity's History of Income and/or Losses A series of losses beyond the startup stage may be indicative of the absence of a profit motive unless such losses can be blamed on unforeseen or fortuitous circumstances beyond the taxpayer's control. Sec. 1.183-2(b)(6), Income Tax Regs. Respondent argues that $265,656 in losses over 7 years weighs against a profit intent. Petitioners argue that losses in the first few years are not indicative of the activity's potential profitability, especially since Constant was either ill or injured for a significant portion of 1994 through 1996. Assuming that there were unforeseen circumstances beyond petitioners' control, such as the series of illnesses and injuries suffered by Constant, petitioners failed to demonstrate a direct correlation between Constant's illnesses and injuriesPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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