- 13 -
that the expenses of the trip should be deducted in connection
with her writing activity because she had taken photos and
interviewed various people.
Petitioners enjoyed traveling and did so frequently. The
recreational aspects of their travel are apparent given many of
their destinations. The personal or recreational aspects of an
activity cannot be ignored in considering a taxpayer's profit
motive. Sec. 1.183-2(b)(9), Income Tax Regs. The fact that the
taxpayer enjoys his or her work does not necessarily indicate the
absence of an intent to profit; however, "where the possibility
for profit is small (given all the other factors) and the
possibility for gratification is substantial, it is clear that
the latter possibility constitutes the primary motivation for the
activity." Smith v. Commissioner, T.C. Memo. 1997-503 (citing
Burger v. Commissioner, T.C. Memo. 1985-523). Weighing the
personal pleasures derived from petitioner's travels against the
profit potential that could result, we are satisfied that the
writing activity was conducted more for the purpose of
subsidizing the costs of the trips than for profit.
Our conclusion on the point is further supported by the
history of losses incurred by petitioner since her writing
activity began. See sec. 1.183-2(b)(6), Income Tax Regs.
"[W]here losses continue to be sustained beyond the period which
customarily is necessary to bring the operation to profitable
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011