- 9 - manner in which the taxpayer carries on the activity; the expertise of the taxpayer or his advisers; the time and effort expended by the taxpayer in carrying on the activity; the expectation that assets used in the activity may appreciate in value; the success of the taxpayer in carrying on other similar or dissimilar activities; the taxpayer’s history of income or losses with respect to the activity; the amount of occasional profits, if any, which are earned; the financial status of the taxpayer; and elements of personal pleasure or recreation. Sec. 1.183-2(b), Income Tax Regs. No single factor is controlling. Golanty v. Commissioner, 72 T.C. 411, 426 (1979), affd. without published opinion 647 F.2d 170 (9th Cir. 1981). Whether a taxpayer’s activity has been engaged in for profit is determined by taking into account all of the facts and circumstances of the case. Sec. 1.183-2(a), Income Tax Regs. Petitioners performed a number of functions which have the superficial indicia of an activity operated for profit. For example, petitioners testified that they prepared a business plan with the assistance of their C.P.A., and the stated plan was to build a network of downline distributors to generate business volume and ultimately to receive “points” or commissions from Amway. Petitioners produced a copy of their written goals (different from their business plan), a one page handwritten document. Petitioners also maintained and produced a log ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011