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respondent’s alternative contention (since abandoned) under
section 195, we are entitled to take it into account in
evaluating petitioner’s history of losses from his videotape
activity.
Nowhere in the record do we find a coherent explanation of
any plan by petitioner to produce a profit from his videotape
activity in either the short run or the long run.
This factor favors respondent.
(7) Amount of Occasional Profits Earned
There were not any occasional profits from petitioner’s
videotape activity. Indeed, as supra table 6 shows, as often as
not there was not even gross income from petitioner’s videotape
activity. The fluctuations in gross income were minor, compared
to the steady progression of increasing Schedule C expenses.
This factor favors respondent.
(8) Taxpayer’s Financial Status
Before petitioner’s wife’s death, petitioner’s videotape
activity losses were generally around 10 percent of his adjusted
gross income before the losses. After petitioner’s wife’s death,
the loss percentages increased, but a new pattern emerged--the
losses from petitioner’s videotape activities left him with about
$50,000 adjusted gross income each year. If petitioner would
have deducted his 1996 Schedule C loss, that would have produced
a 1996 adjusted gross income of $50,665. Supra table 6.
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