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The issue for decision is whether petitioners are entitled to
deduct losses attributable to their yacht chartering activity.
We hold that they are not so entitled.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. At
the time petitioners filed their petition, they resided in
Beverly Shores, Indiana.
During the years in issue, Mr. Oberle was a stockbroker for
Dean Witter Reynolds, Inc., and Ms. Oberle was a real estate
broker for Price Realtors, Inc. On or about September 11, 1993,
petitioners purchased a 38-foot yacht for $143,000, entered into
a 7-year Charter Brokerage Agreement (agreement) with Michigan
City Sailboat Charters, Inc. (broker), and docked the yacht in
one of the broker's slips at Michigan City, Indiana.
The agreement provides that the broker is responsible for
the following duties: (1) Showing the yacht to prospective
charterers; (2) signing any and all documents pertaining to the
charter of the yacht; (3) collecting fees from charterers; (4)
making mechanical repairs of items damaged during a charter; (5)
meeting the charterers at the yacht; (5) reviewing yacht
equipment and operations; (6) taking charterers on orientation
cruises; (7) cleaning the yacht on completion of the charter; and
(8) taking all necessary steps to charter the yacht. In exchange
for these services, the broker received a commission of 50
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