Robert and Joyce Dirkse - Page 16

                                       - 16 -                                         
          Schedule C activities for profit.  See Hillman v. Commissioner,             
          T.C. Memo. 1999-255.  Considering all the years of substantial              
          losses, petitioners did little to demonstrate an expertise for the          
          economics of these operations.  Consequently, this factor weighs            
          against a finding that petitioners’ Schedule C activities were              
          carried on with the intent to make a profit.  See Kahla v.                  
          Commissioner, T.C. Memo. 2000-127.                                          
               3.  Time and Effort Expended in the Activity                           
               The fact that a taxpayer devotes much of his or her personal           
          time and effort in carrying on an activity, particularly if the             
          activity does not have substantial recreational aspects, may                
          indicate a profit motive.  See sec. 1.183-2(b)(3), Income Tax Regs.         
               During the years at issue, petitioner traveled to their Corona         
          property at least three times a week and often spent the weekends           
          there accompanied by Mrs. Dirkse.  While on the property,                   
          petitioner spent significant periods of time supervising his                
          laborers as well as assisting in the tree-farming and apiary                
          activities.  In addition, petitioners conducted many of the retreat         
          activities and managed the rental of their trailers.  Moreover,             
          they often spent their free time learning about apiary and tree             
          farming.  Consequently, this factor weighs in favor of finding a            
          profit motive.                                                              

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011