- 20 -
his mining expeditions were substantial. In a recent
consideration of mining for gold and precious metals in the
southwestern United States, this Court found that such gold
mining is “an extremely laborious activity that requires
substantial time, energy, and financial support. Mining also
entails numerous health risks, including heat prostration in the
summer months, silicosis, and cyanide poisoning.” Tinnell v.
Commissioner, supra. In light of the hardships and serious
dangers involved, we are convinced that any personal pleasure or
recreational aspects that petitioner might have enjoyed while
mining for gold were secondary. Moreover, some component of
personal pleasure does not negate a bona fide profit objective.
“[A] business will not be turned into a hobby merely because the
owner finds it pleasurable; suffering has never been made a
prerequisite to deductibility. ‘Success in business is largely
obtained by pleasurable interest therein.’” Jackson v.
Commissioner, 59 T.C. 312, 317 (1972) (quoting Wilson v. Eisner,
282 F. 38, 42 (2d Cir. 1922)); see also sec. 1.183-2(b)(9),
Income Tax Regs. This factor favors petitioners’ position.
Conclusion
In this case we are satisfied that, despite the substantial
losses over an extended period, during the years in issue
petitioners had a bona fide profit objective. This conclusion is
far from unique. See Engdahl v. Commissioner, 72 T.C. 659 (1979)
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011