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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.
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