Richard A. Stasewich - Page 10

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          ranged from $266 to $770 annually, during the years in issue,               
          while expenses ranged from $11,279 to $32,544 annually.  Based on           
          the evidence, it appears that petitioner never expected to recoup           
          the large losses that he generated from his artist activity.                
               Substantial income from sources other than the activity may            
          indicate that the activity is not engaged in for profit.  See               
          sec. 1.183-2(b)(8), Income Tax Regs.  In general, a taxpayer with           
          substantial income unrelated to the activity can more readily               
          afford a hobby.  See Stasewich v. Commissioner, supra.                      
               Petitioner had an independent source of income, from his               
          accounting business, and did not rely on his artist activity to             
          support himself.  Additionally, for 1991 and 1993 (although 1991            
          is not in issue) petitioner reported a loss from his artist                 
          activity exactly equal to the income from his accounting                    
          activity.  Such an unlikely coincidence indicates that petitioner           
          may be using his artist activity as a device to eliminate Federal           
          income tax on the income from his accounting business.  This                
          pattern weighs against finding a profit objective.                          
               That a taxpayer derives personal pleasure from a particular            
          activity does not necessarily mean that he or she lacks a profit            
          objective with respect to the activity.  See Glenn v.                       
          Commissioner, T.C. Memo. 1995-399, affd. without published                  
          opinion 103 F.3d 129 (6th Cir. 1996); sec. 1.183-2(b)(9), Income            
          Tax Regs.  Where, however, there are recreational or other                  
          personal elements involved, the personal motives may negate the             

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