Walter J. Piszczek - Page 13

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          1.183-2(b)(5), Income Tax Regs.  There is no evidence petitioner            
          had previously engaged in the business of developing or                     
          profitably exploiting new technologies of the sort involved in              
          this matter.                                                                
               This factor does not support a conclusion that petitioner's            
          activity was profit motivated.                                              
          8 & 9.  Financial Status of Taxpayer and Elements of Personal               
          Pleasure                                                                    
               Substantial income from sources other than an activity,                
          particularly if the activity's losses generated 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)(8) and (9),                
          Income Tax Regs.  Petitioner's average salary as a pilot for the            
          period 1988-90 was over $137,500.  During the first 14 years of             
          the project, petitioner's outlays were approximately $16,000 a              
          year, approximately 11 percent of his earnings for the years in             
          issue.  This is not out of line with what a person in                       
          petitioner's income bracket might spend on a hobby or                       
          recreational activity.  Petitioner was driven more by a desire to           
          satisfy his intellectual curiosity and to vindicate his theories            
          than by the potential for deriving a profit.  Thus there is a               
          considerable element of personal pleasure or satisfaction in                
          petitioner's efforts.                                                       
               These factors do not support a conclusion that petitioner's            
          activity was profit motivated.                                              


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