- 13 - Cir. 1986); sec. 1.183-2(a), Income Tax Regs. Petitioners have the burden of proving that they engaged in the chartering activity with the intent to make a profit. Rule 142(a). Section 1.183-2(b), Income Tax Regs., provides a list of factors to be considered in the evaluation of a taxpayer's profit objective: (1) The manner in which the taxpayer carries on the activity; (2) the expertise of the taxpayer or his advisors; (3) the time and effort expended by the taxpayer in carrying on the activity; (4) the expectation that assets used in activity may appreciate in value; (5) the success of the taxpayer in carrying on other similar or dissimilar activities; (6) the taxpayer's history of income or losses with respect to the activity; (7) the amount of occasional profits, if any, from the activity; (8) the financial status of the taxpayer; and (9) elements of personal pleasure or recreation. The number of factors for or against the taxpayer is not necessarily determinative, but rather all facts and circumstances must be taken into account, and more weight may be given to some factors than to others. Cf. Dunn v. Commissioner, 70 T.C. 715, 720 (1978), affd. 615 F.2d 578 (2d Cir. 1980). During the years at issue, petitioners did not conduct the chartering activity in a businesslike manner. Petitioners failed to maintain any books and records. Herbert testified that they did not retain receipts from customers. Petitioners also indicated that they had no business plan for the activity.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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