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still held title to the equipment and which remained in
existence at least until July 1, 1988.6
Petitioners argue that even if the manufacturing equipment
was idle after petitioner acquired it, he nevertheless should be
considered to be in the trade or business of metal fabrication,
because he continued, albeit unsuccessfully, to pursue new work
orders until the equipment was repossessed by NAC in the summer
of 1990. Apart from petitioner’s self-serving and
uncorroborated testimony, however, there is no evidence of such
business activity. Petitioner’s testimony does not credibly
establish that he was involved in his personal capacity in the
metal fabrication business with continuity or regularity, with
the primary purpose of producing income or profit. Cf.
Commissioner v. Groetzinger, 480 U.S. at 35. To the contrary,
petitioner testified that during the years at issue, he was so
busy in his family law practice that petitioners were unable
even to file timely tax returns.
Having failed to establish that they were engaged in the
trade or business of manufacturing vending machines, petitioners
have failed to show that the depreciable assets were used in a
6 That Pacer remained in business on July 1, 1988, is
indicated by the July 1, 1988, asset sale agreement between Pacer
and Venco, which states that Pacer “contemplates the cessation of
all business operations, and the potential of filing for
protection under the Bankruptcy Code of the United States of
America.”
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