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with the information required to make informed business
decisions. See Burger v. Commissioner, 809 F.2d 355, 359 (7th
Cir. 1987), affg. T.C. Memo. 1985-523. Without such a basis for
decision, any profit would be fortuitous, and losses would be
expected. See id.
Mr. Flanagin did not make any written forecasts or
projections of future income. He conducted his activity unaware
of the amount of revenue he could expect and had no concept of
what his ultimate costs might be or how he might achieve any
degree of cost efficiency.
Mr. Flanagin did not keep adequate records of the software
development activity. The record demonstrates that Mr.
Flanagin's actions were not businesslike and indicates that he
lacked a profit motive.
B. Expertise of Mr. Flanagin
A taxpayer's expertise, research, and study of an activity,
as well as his consultation with experts, may be indicative of a
profit intent. See sec. 1.183-2(b)(2), Income Tax Regs.
"Taxpayers should not only familiarize themselves with the
undertaking, but should also consult or employ an expert, if
needed, for advice on how to make the operation profitable."
Burger v. Commissioner, supra at 359.
Mr. Flanagin had software writing experience; however, he
was not knowledgeable about the economics of the activity. Mr.
Flanagin did not seek professional advice on the economic aspects
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