Anthony J. McCarthy - Page 7




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            the latter indicates the likelihood of a profit motive.  See                               
            Golanty v. Commissioner, 72 T.C. 411, 432 (1979); Burger v.                                
            Commissioner, 809 F.2d 355, 359 (7th Cir. 1987), affg. T.C. Memo.                          
            1985-523; sec. 1.183-2(b)(2), Income Tax Regs.                                             
                  Petitioner was clearly an expert in racing in the amateur                            
            context, but we find that the record does not establish that he                            
            was an expert in conducting the activity for profit, or that he                            
            actively sought such expertise elsewhere.  Despite the fact that                           
            petitioner personally engaged in motocross racing as an amateur                            
            for 2 years, there is no evidence that he was so engaged on a                              
            businesslike basis or that he sought to earn a profit from that                            
            activity.  There is also no evidence in the record that                                    
            petitioner managed any motocross racer other than his son.                                 
            Although petitioner investigated sponsorship opportunities and                             
            other methods by which his son could potentially earn future                               
            income, there is nothing in the record which establishes that                              
            petitioner studied business and economic practices or consulted                            
            with an accountant to advise him financially about the racing                              
            activity prior to engaging in the activity.  Furthermore, there                            
            is no evidence indicating petitioner analyzed the overall cost or                          
            necessary capital investment relative to potential revenue.  See,                          
            e.g., Nichols v. Commissioner, T.C. Memo. 1990-546.                                        
                  This factor favors respondent.                                                       








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