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admitted that one of the major benefits of being Amway
distributors was the savings that they could realize on the
purchase of products for personal use. The fact that Mrs. Meyer
has continued to renew her Amway membership in order to purchase
merchandise at discount prices illustrates the personal dimension
of the Amway activity.
On this record, we find that petitioners did not have the
requisite objective in 1997 of making a profit in the Amway
activity. Accordingly, we hold that petitioners are not entitled
to deduct the loss from the Amway activity for that year.
Reviewed and adopted as the report of the Small Tax Case
Division.
In order to give effect to our disposition of the disputed
issue, as well as respondent’s concession, see supra note 2,
Decision will be entered
under Rule 155.
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