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There was no evidence, however, as to the dates on which any of
the individuals were on the yacht, and there was no corroboration
of petitioner’s broad assertions. Although the record supports a
finding that petitioner spent a great deal of time and effort in
the activity, none of the other factors listed above favors
petitioners.
In this case, the most persuasive evidence is the history of
income or losses incurred with respect to the activities and the
absence of any profit, i.e., factors (6) and (7) above.
Petitioner’s own words, quoted in the interview published in
1986, indicate that profits would be unusual and unexpected. The
evidence of actual losses claimed, without any indication of a
means of recouping any of them, compels the conclusion that the
activity was not engaged in for profit. We conclude that
petitioner lacked the requisite profit objective and that
respondent correctly characterized the activity as a personal
hobby of petitioner.
In view of our conclusion as to the lack of the requisite
profit objective, it is not necessary to address respondent’s
alternative contention that the expenses were not properly
substantiated.
Bad Debt Expense
In the statutory notice of deficiency, respondent determined
that the $100,000 amount claimed by petitioners for 1990 as a
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