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1996, from $79,157 in 1994 to $120,278 in 1996. In fact,
petitioners acknowledged that they are unable to predict when, or
if, their Schedule C activities will become profitable.
Consequently, this factor weighs against a finding of a profit
motive.
2. Expertise of Taxpayer or Advisers
Preparation for an activity after conducting an extensive
study or consultation with experts regarding the accepted business
practices of the activity may indicate a profit motive where the
taxpayer conducts the activity in accordance with such study or
advice. See sec. 1.183-2(b)(2), Income Tax Regs. Conversely, a
taxpayer’s failure to obtain expertise in the activity may indicate
a lack of profit motive. See Burger v. Commissioner, 809 F.2d 355,
359 (7th Cir. 1987), affg. T.C. Memo. 1985-523.
Prior to entering into their Schedule C activities,
petitioners consulted with and relied upon the advice of members of
the macadamia and persimmon societies, as well as an experienced
beekeeper. Moreover, they spent a considerable amount of time and
effort researching their Schedule C activities. Indeed, when the
advice of a paid consultant turned out to be incorrect, petitioners
were able to identify the source of the problem and take remedial
action.
The fact that petitioners consulted technical, noneconomic
experts does not necessarily indicate that they carried on their
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