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of his argument that petitioner’s and LFI’s use of Granot Loma
was not an activity for profit are the substantial history of
losses generated by the alleged business activity, the complete
lack of any profits from the activity over a 6-year period,
petitioner’s financial status during the years at issue, and the
personal pleasure and recreation derived by petitioners from
their use of Granot Loma.
The record in this case reveals that petitioners purchased
Granot Loma and renovated the lodge and other parts of the
property, in part, for possible commercial use in the future. In
so doing, petitioner consulted with advisers regarding equipment
and systems to be installed in the lodge and around the property
to support commercial use. The record also reveals, however,
that the renovation was designed to enable petitioner and his
family to use Granot Loma as their residence.
Whatever petitioner’s intention might have been regarding
the operation of Granot Loma as a commercial property at some
point in the future, the evidence convinces us that Granot Loma
was purchased primarily for use as petitioners’ residence and it
was used primarily as a residence; i.e., as petitioners’ vacation
home. Like any other residence, Granot Loma was used by
petitioners for their own enjoyment and to entertain family,
friends, and business acquaintances. Occasional entertainment of
petitioner’s business acquaintances, however, does not support a
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