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Taking into account the above factors and considering the
facts and circumstances relating to petitioner’s writing
activity, as discussed more fully below, we are not persuaded
that during the years in issue petitioner engaged in that
activity with the objective to make a profit.
1. Manner in Which Activity Conducted
The fact that a taxpayer carries on an activity in a
businesslike manner and maintains complete and accurate books and
records may indicate that the activity was engaged in for profit.
See sec. 1.183-2(b)(1), Income Tax Regs.
Petitioner managed some aspects of this activity in a
businesslike fashion. He maintained records of his expenses and
regularly researched and submitted articles and novels to the
various periodicals and literary agents. Some of petitioner’s
activities belied any profit objective. For instance, the
income-producing potential of petitioner’s gun experiments seemed
to be of little concern to petitioner. Petitioner was not an
expert in gun testing, yet he incurred gun-related expenses to
conduct his tests without first researching whether there would
be an interest in such findings from a lay person. Petitioner
decided to conduct gun testing, incurring expenses, regardless of
the amount of income he could objectively expect from a gun
article.
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Last modified: May 25, 2011