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amounts paid in connection with his son's motocross racing
activity because the activity was not entered into for profit
during the year in issue. The Court of Appeals stated: "The
principal error in the Tax Court's decision is that it gave
dispositive weight to the fact that McCarthy's son was an amateur
in the tax year in question, and, therefore, '[t]here was no
possibility that petitioner could have realized a profit from his
management activity' in that year. * * * The inability to make
a profit in a particular year is not, however, by itself
dispositive." The Court of Appeals stated:
It may be that, on remand, the Tax Court will
conclude that the evidence relied on by McCarthy is
insufficient to establish that he had the requisite
profit motive. However, such a determination must be
based on all the facts and circumstances, not merely on
one or two facts that favor the Commissioner's
position. See Ranciato, 52 F. 3d at 26. On remand,
the Tax Court should explicitly weigh factors that may
favor the taxpayer such as the manner in which McCarthy
carried on his management activities, his expertise in
the motocross business, his foregoing advancement as a
construction worker, and his financial situation.
We have reconsidered the facts in this case on remand as
instructed by the Court of Appeals, McCarthy v. Commissioner, 164
F.3d 618 (1998), and remain firmly convinced that petitioner did
not engage in managing and promoting his son's amateur motocross
racing activity during 1993 with the requisite intent to profit.
We therefore adhere to our holding in McCarthy I.
We incorporate herein by this reference the facts found in
McCarthy I.
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