Thomas and Linda O'Connell - Page 12




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               Section 1.183-2(b), Income Tax Regs., lists some of the                
          factors to be considered in determining whether an activity is              
          engaged in for profit.  The factors listed in the regulation are            
          as follows:                                                                 
                    (1) Manner in which the taxpayer carries on the                   
               activity.                                                              
                    (2) The expertise of the taxpayer or his advisors.                
                    (3) The time and effort expended by the taxpayer                  
               in carrying on the activity.                                           
                    (4) Expectation that assets used in 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.                         
                    (9) Elements of personal pleasure or recreation.                  
               These factors are not intended to be exclusive, and no one             
          factor or majority of the factors need be considered                        
          determinative.  See Golanty v. Commissioner, 72 T.C. 411, 426-427           
          (1979), affd. without published opinion 647 F.2d 170 (9th Cir.              
          1981).                                                                      
               Petitioner, during his testimony, repeatedly claimed that              
          the Billfish activity was a business.  He claimed that certain              
          identified employees of the insurance entities used the yacht.              






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