Richard A. Stasewich - Page 8

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          hired art students as his employees.  Petitioner kept a                     
          spreadsheet of income and expenses; a cash receipts journal;                
          receipts for expenses; Forms ST-1, Sales and Use Tax Returns;               
          Forms W-2, Wage and Tax Statements; and a Certificate of                    
          Registration to sell tangible property in Illinois.  Although               
          petitioner’s artist activity had some of “the trappings of a                
          business”, such “trappings” are insufficient to demonstrate that            
          the activity was a business carried on for profit.  Golanty v.              
          Commissioner, supra at 430.  Petitioner’s maintenance of such               
          books and records may represent nothing more than a conscious               
          attention to detail.  See id.  Petitioner failed to show that the           
          books and records were kept for the purpose of cutting expenses,            
          increasing profits, and evaluating the overall performance of the           
          operation.  He did not maintain a budget for the activity or make           
          any sort of financial projections.  Petitioner has not persuaded            
          us that he conducted his artist activity in a businesslike                  
               Where losses continue to be sustained beyond the period that           
          customarily is necessary to bring the operation to profitable               
          status, such continued losses, if not explainable, as due to                
          customary business risks or reverses, may be indicative that the            
          activity is not being engaged in for profit.  See sec. 1.183-               
          2(b)(6), Income Tax Regs.  A taxpayer’s failure to implement any            
          operating changes after continued losses may indicate the lack of           
          intent to make a profit.  See Brodrick v. Derby, 236 F.2d 35, 38            

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