- 12 -12 this income was reduced by the $13,217 which he spent in support of Benjamin's amateur motocross racing activity. Furthermore, as more fully discussed, infra, at factor 9, the activity was both personal and recreational with respect to petitioner and his son: petitioner’s actions were as consistent, if not more consistent, with one who wishes to participate in an activity with his son as with one who wishes to supplement his already substantial income. This factor favors respondent. 9. Elements of Personal Pleasure or Recreation. The presence of personal motives in carrying on an activity, especially where there are recreational or personal elements involved, may indicate that the activity is not engaged in for profit. See sec. 1.183-2(b)(9), Income Tax Regs. Profit need not be the only objective, however, and personal motives may coexist with an actual and honest intent to derive a profit. See id. Benjamin was unable to earn any potential profit for several years after the year in issue. Furthermore, any potential profit was dependent upon many unknown variables involved with beginning a professional career–-such as Benjamin’s future size, abilities, and even desire to continue pursuing the activity into his late teen and early adult years. Finally, the motocross racing activity was inherently recreational and was conducted as an activity to be shared by father and son. Considering thesePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011