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treasure salvaging activity for purposes of section 183.1 There,
after noting that the taxpayer’s record keeping “left something
to be desired”, we said:
The treasure hunting activity was different from
petitioner’s other businesses. Different record
keeping methods are therefore expected, and lack of
record keeping is not determinative of intent.
Treasure hunting is not the type of business where
thorough records of gains and losses are necessary to a
successful operation. Cf. Farrell v. Commissioner,
T.C. Memo. 1983-542. This type of activity is likely
to generate only expenditures with no income until a
find is made at which time the income will come in one
lump sum. * * * [Id.]
Here, as in the Harrison case, petitioner kept no formal set
of books and records for his gold mining and prospecting
activity. He did not maintain a general ledger or a spreadsheet.
No financial statements ever were prepared, except a balance
sheet prepared for petitioner’s meeting with an IRS Appeals
officer. Petitioner did have a business plan, but it was written
in December 2000, long after the years in issue. Petitioner did
not maintain a separate bank account for his gold mining
activity.
Petitioner’s record keeping consisted of the maintenance of
separate folders for his expenses. As he incurred each expense,
he put the receipt in the appropriate folder.
1The Court treated the taxpayer’s gold mining and treasure
salvaging operations as one activity for purposes of sec. 183.
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