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profitability are counterbalanced by petitioner’s failure to
demonstrate that he maintained accurate and businesslike books
and records and to introduce evidence regarding the operation of
successful mining ventures. See Engdahl v. Commissioner, 72 T.C.
at 666-667; sec. 1.183-2(b)(1), Income Tax Regs. We, therefore,
must conclude that this factor is neutral.
2. The Expertise of Petitioner or His Advisers
Preparation for an activity by extensive study of its
accepted business, economic, and scientific practices or
consultation with industry experts may indicate a profit motive
where the taxpayer carries on the activity in accordance with
such practices. See sec. 1.183-2(b)(2), Income Tax Regs.
Petitioner demonstrated that he had a thorough understanding
of the scientific and economic aspects of mining and that he
regularly consulted with industry experts. In 1978, petitioner
began reading prospecting books and became interested in mining.
Petitioner attended shows and seminars about mining and purchased
numerous books on geology and mining. Petitioner also learned
how to read geological mining maps. Petitioner learned about
mining both from self-teaching methods and experience over the
years. Petitioner also did consulting work in or about 1988 with
Kent Kjelberg at the Rattlesnake Mine and provided his expertise
and equipment to help develop the mine.
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