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portable mining device that allowed him to travel long distances
on foot to remote mining locations in the desert.
Petitioner relied on both his own expertise about mining in
general and his research concerning gold mining specifically.
Petitioner did not seek professional advice on the business and
economic aspects of gold mining. We view his failure to seek
such professional advice before commencing his gold mining
activity as counterbalancing his significant experience in mining
in general. We, therefore, conclude that this factor is neutral.
3. Petitioner’s Time and Effort Devoted to the Activity
The fact that a taxpayer devotes much of his personal time
and effort to carrying on an activity may indicate an intention
to derive a profit, particularly if the activity does not have
substantial personal or recreational aspects. See Daley v.
Commissioner, T.C. Memo. 1996-259; sec. 1.183-2(b)(3), Income Tax
Regs. A taxpayer’s withdrawal from another occupation to devote
most of his energies to the activity may be evidence that the
activity was engaged in for profit. Sec. 1.183-2(b)(3), Income
Tax Regs.
Both parties agree that petitioner devoted a significant
amount of time and effort to his gold mining activity. During
the years in issue, petitioner compressed a 40-hour workweek
schedule into 4 days. Because of this arrangement of his
employment, he was able to spend 3 consecutive days each week
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