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consequences. See Campbell v. Commissioner, 868 F.2d at 836;
Ronnen v. Commissioner, 90 T.C. at 92.
In 7 years, petitioners' sponsorship activity never
generated a profit. Of greater significance, we find it highly
unlikely that petitioners would have recognized a substantial
ultimate profit given Constant's position as a golf instructor
and his lack of success in tournament play. This factor supports
respondent's determinations.
8. Financial Status of Taxpayer
Substantial income from sources other than the activity
(particularly if the losses from the activity generate
substantial tax benefits) may indicate that the activity is not
engaged in for profit. This is especially true where there are
personal or recreational elements involved. Sec. 1.183-2(b)(9),
Income Tax Regs. Respondent argues that petitioners have
substantial income from other sources and that the losses
generated by their sponsorship activity have given them
substantial tax benefits for the last 7 years.
In 1992, absent the losses generated by the sponsorship
activity, petitioners had taxable income of $61,244. With the
loss deductions, petitioners' 1992 taxable income was $9,783. As
to 1993, absent the losses generated by the sponsorship activity,
petitioners had taxable income of $199,087. With the loss
deductions, petitioners' 1993 taxable income was $131,040.
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