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featured on the front cover of two magazines in 1997, Hot Street
Cars and Bracket Racing USA.
Petitioner raced automobiles when he was younger, but he had
to discontinue the activity because it was too costly. Between
1992 and 1997, petitioner lost over $150,000 on the automobile
drag racing activity in this case. Petitioner did receive a
small number of cash prize awards in the hundreds of dollars from
the activity. However, except for reporting $200 of winnings in
1994, petitioner never reported any income from this activity on
his tax returns. Petitioner maintained no written records
related to races or how he had placed in any races. Petitioner
did not maintain a separate checking account for this activity.
Petitioner had no business plan for his automobile drag
racing activity and made no forecasts of income or expenses.
Although he tried to find one, petitioner had no sponsor or other
financial backers to finance his activity.
Petitioner stopped the racing activity in 1997 or 1998.
Since his departure from racing, petitioner has tried to sell his
race car. Although petitioner has over $100,000 invested in the
race car, the highest offer he has received for the car is
$20,000, which he rejected.
Petitioner devoted about 40 hours per week to the automobile
drag racing activity, which included working on the race car and
racing the car two to three nights a week at a race track.
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