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cites was the annual increase in the per capita rate charged for
a visit to Granot Loma. While it is true that LFI increased the
per capita rate on an annual basis from 1990 through 1992, the
increases were not supported by any meaningful economic analysis,
and the rate increases did not have a material impact on LFI’s
profitability.
Petitioner also argues that, when he purchased Granot Loma,
he intended to earn a profit from the property, at least in part,
by renovating and selling it as a commercial property.
Petitioners paid $4,380,000 for the property, invested
approximately $2,500,000 more in renovation costs, and expended
millions more in operating costs from 1987 through 1992.
Petitioner has not convinced us that he purchased Granot Loma
with any intention of selling it at a profit (as opposed to using
it as a residence), or that he seriously believed that any
appreciation in the fair market value of Granot Loma would be
sufficient to offset the cumulative losses and generate a profit.
Petitioner correctly points out that his and LFI’s intention
to make a profit from Granot Loma need not be reasonable, and he
argues that the considerable time he spent working on LFI’s
alleged business activities provides objective support for his
subjective statement of intent. We reject this argument because,
like much of the evidence petitioner cites in support of his
arguments, the evidence of time spent by petitioner on LFI’s
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