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preceding factors should somehow be made differently in his case.
However, petitioner has submitted no evidence that he holds or
has applied for any patents or that he has ever developed for
profit any new device, process, or technology aside from the
Windmill Distillery activity in issue here. To prevail,
petitioner must demonstrate an honest objective to profit by
developing his Windmill Distillery.
We turn to a review of the relevant factors:
1. Manner in Which the Activity Is Conducted
Objective facts showing that a taxpayer carries on an
activity in a businesslike manner indicate a profit objective.
Sec. 1.183-2(b)(1), Income Tax Regs.
In several respects, petitioner did not conduct his activity
in a businesslike fashion.
The only evidence that petitioner ever attempted to
investigate the potential profitability of the venture consists
of a series of calculations he did at one point which indicated
that under some circumstances it would be possible to produce
alcohol for fuel at a cost of $1.04 per gallon. In 14 years of
increasingly heavy expenditures, there is no indication
petitioner revisited those calculations in light of what he had
learned from his endeavors. His investigation of costs for raw
materials was sketchy and informal. Petitioner seems to have
done little more than telephone a few local farmers at one point
in this long-term project to find out the price at which
distressed corn was then selling. Though costs of competing fuels
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