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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 injuries
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