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supposedly petitioners’ personal friends, and others in the Amway
chain, did not testify to confirm petitioners’ efforts and
expenditures.
Substantial income from sources other than the activity may
indicate that the activity is not engaged in for profit,
particularly if the losses from the activity generate substantial
tax benefits. Sec. 1.183-2(b)(8), Income Tax Regs. Petitioners
were not wealthy people. They explain their needs for funds for
retirement and other purposes. However, in the years in issue,
Mr. and Mrs. Landrum maintained full-time jobs apart from their
Amway activity. They reported combined wages for 1996 and 1997
of $83,797.08 and $86,401.55, respectively. This income was more
than sufficient to allow their Amway losses to generate
substantial tax benefits.
Mr. Landrum said he enjoyed meeting “good people” in his
Amway sales efforts, although he did not enjoy the rejection of
his proposals. Petitioners qualified to attend Amway promotional
weekend meetings by accumulating the required points within a
limited time. They qualified by buying a vacuum cleaner and
making other Amway purchases themselves, not by selling to others
or enlisting downline distributors. Nevertheless, petitioners
attended numerous inspirational weekend programs, both together
and separately. Mr. Landrum explained the excitement and
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