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indicative of the requisite intent. Nonetheless, because of the
complete absence of evidence to show that the profits resulted
from any conscious efforts or calculation on the part of
petitioner, the apparent fortuitous nature of the positive
returns is not overcome.
The financial status factor is likewise not supportive of
petitioner’s claims. Adjusted gross income from other sources
totaled over $300,000 in both of the years for which losses were
disallowed. Petitioner could afford and benefit taxwise from the
loss.
Finally, it is unlikely that petitioner owned, maintained,
and flew a personal aircraft without finding some pleasure in the
activity. Also, the much greater percentage of time that the
aircraft was devoted to personal rather than business use (given
that the ranch failed to qualify as a business) indicates that
personal motives predominated over profit motives. Thus, as with
the cattle-ranching enterprise, section 183 precludes petitioners
from deducting losses related to the aircraft-rental business.
Respondent’s determinations of deficiencies are therefore
sustained as to both activities.
Penalty Issue
The final issue we must decide is whether petitioners are
liable, as respondent contends, for accuracy-related penalties
based on negligence. Section 6662(a) and (b)(1) imposes an
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