-24-
(5) Taxpayer’s Success in Other Activities
Petitioner had a long and successful military career.
Petitioner then worked for large electronics companies. He then
worked for an engineering consulting firm which he had founded.
The record does not indicate how successful petitioner was in his
civilian jobs. We cannot tell from the record that any of
petitioner’s jobs were sufficiently similar to his videotape
activity so that his degree of success in those jobs would be
helpful in predicting success in his videotape activity.
(6) History of Income or Losses From the Activity
Petitioner’s videotape activity produced a loss for every
year since the activity’s inception. As supra table 6 shows, the
losses trended upward with only minor fluctuations. By the end
of the last year in issue, petitioner was already past 80 years
old, with no indication that he would give up his videotape
activity and no indication that he would make any major change in
the way he conducted his videotape activity.
A series of losses during the initial or startup stage of an
activity may not necessarily be an indication that the activity
is not engaged in for profit. However, by the time of the years
in issue, petitioner’s videotape activity was no longer in its
initial or startup stage. Although the parties’ stipulation
“that the expenses on petitioner’s Schedule C for 1993 to 1995 do
not represent startup cost” was evidently directed primarily to
Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NextLast modified: May 25, 2011