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objective, especially if there are personal or recreational
elements involved.
The Browns are not wealthy people. During the years in
issue, petitioner reported wages of $34,689 and $42,811,
respectively, while Mrs. Brown did not work for compensation.
Their only source of income was petitioner’s wages. Although
petitioners were able to offset the full amount of the losses
from their gold mining activity against Mr. Brown’s wages, the
resulting tax benefits to petitioners were not very substantial.
This activity was not a tax shelter. This factor favors
petitioners.
9. Elements of Personal Pleasure or Recreation
The presence of personal or recreational elements in
carrying on an activity may indicate that the activity is not
engaged in for profit. On the other hand, a profit objective may
be indicated where an activity lacks any appeal other than
profit. Sec. 1.183-2(b)(9), Income Tax Regs.
At trial, no significant testimony or evidence was presented
about any personal pleasure or recreational aspects of gold
mining that petitioner may have enjoyed. Nearly every week
during the years in issue, petitioner sacrificed his entire
weekend with his family to travel alone into the deserts of
southern California to mine for gold. Family members rarely
accompanied him. Also, the risks of injury petitioner faced on
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