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activity was engaged in for profit: (1) The manner in
which the taxpayer carries on the activity; (2) the
expertise of the taxpayer or his advisers; (3) the time
and effort expended by the taxpayer in carrying on the
activity; (4) the expectations that assets used in the
activity may appreciate in value; (5) the success of the
taxpayer in carrying on other similar or dissimilar
activities; (6) the taxpayer's history of income or losses
with respect to the activity; (7) the amount of occasional
profits, if any, which are earned; (8) the financial status
of the taxpayer; and (9) any elements of personal pleasure
or recreation. See sec. 1.183-2(b), Income Tax Regs.
The properties purchased by EA 83-XII and EA 84-III
were highly leveraged and produced operating losses. The
offering memorandum issued by each partnership disclosed
the fact that the partnership would incur such operating
losses and that the properties had to appreciate in value
in order for an investor to realize a profit. The offering
memorandum issued for EA 83-XII projected a break-even
appreciation rate of 7.99 percent, and the offering memo-
randum for EA 84-III projected a break-even appreciation
rate of 9.15 percent. The appreciation rates required for
a profit were high, but there is nothing in the record of
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