-23-
extensive managerial experience covering numerous positions
including running his own engineering consulting firm and
commanding a destroyer during World War II.
This factor favors petitioner.
(3) Time and Effort Spent in the Activity
Petitioner testified that, on average, he spent about 50 to
60 hours per week on his videotape activities. On brief,
petitioner claims only about 30 hours per week. In either event,
it is evident that petitioner spent substantial time and effort
on his videotape activities, making this a factor pointing toward
a profit objective.
(4) Expectation That Assets May Appreciate in Value
A taxpayer’s “bona fide expectation” that assets used in a
questioned activity will appreciate in value is a factor pointing
toward a conclusion that the taxpayer engaged in the questioned
activity for profit. Engdahl v. Commissioner, 72 T.C. at 668-
669; Allen v. Commissioner, 72 T.C. at 36.
The parties have stipulated that “petitioner had incurred
$155,553 of costs for video equipment by the end of 1995, of
which $74,977 was incurred from 1993-1995.” On brief petitioner
concedes that this equipment “will not increase in value”.
This factor favors respondent.
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