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not the equivalent of the actual and honest objective of earning
a profit.” Riddle v. Commissioner, T.C. Memo. 1994-133.
Moreover, Tony could not earn a substantial profit without
securing large sponsors, which he failed to do.
This factor favors respondent.
8. Taxpayer’s Financial Status
Substantial income from sources other than the activity may
indicate the lack of a profit motive, particularly if (1) losses
from the activity generate substantial tax benefits, and (2)
personal or recreational elements are involved. Sec. 1.183-
2(b)(8), Income Tax Regs.
Tony had substantial income from CRC and his commercial real
estate ventures. In 1992, Tony received $50,000 in cash
consideration of his interests in CRC and reported receiving
$699,925 from the sale of the joint ventures, as well as wage
income of $51,931 from CRC. As previously discussed, there were
strong personal and recreational elements to Tony’s stock car
activity.
This factor favors respondent.
9. Elements of Personal Pleasure
Elements of personal pleasure or recreation may signal the
absence of a profit motive. Sec. 1.183-2(b)(9), Income Tax Regs.
The evidence clearly shows that Tony enjoyed and obtained
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