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Petitioners' search for jade also allowed petitioners to take
field trips to the beaches of Southern California and the deserts
of New Mexico. Moreover, petitioners won several ribbons for
their jade exhibits at gem and mineral exhibitions. We find that
petitioner's own testimony reveals petitioners' true purpose for
engaging in the jade activity. During the trial, petitioner
described members of gem and mineral societies as "a collection
of good-hearted people with a hobby vested interest". Petitioner
further described the jade activity as an "anti-job" that is
exciting, fun, and relaxing.
For the foregoing reasons, we find that petitioners did not
engage in the jade activity for profit. Accordingly, we hold
that petitioners are not entitled to the Schedule C deductions
they claimed on their 1996 Federal income tax return.
Based upon our holding, we need not and do not decide
whether petitioners have substantiated the nature and amount of
the claimed expenses.
To reflect the foregoing,
Decision will be entered
for respondent.
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