- 37 -
year from his bond trading activities and who offset his earned
income with over $3,300,000 of LFI’s losses;
(3) petitioner insured Granot Loma as a second residence and
certain personal property at Granot Loma as his personal, and
insurable, property;
(4) LFI did not generate a profit from its alleged operation
of Granot Loma during any year at issue;
(5) petitioners never transferred Granot Loma’s legal title
to LFI; and
(6) petitioner and his family, friends, and business
acquaintances derived considerable personal pleasure from their
use of Granot Loma.
On balance, we conclude that petitioner has failed to prove
by a preponderance of evidence that LFI was engaged in the
conduct of a trade or business under section 162 or that any
activity allegedly conducted by LFI at Granot Loma was an
activity for profit.17 Consequently, we sustain respondent’s
determination that LFI was not engaged in an activity for profit.
B. Respondent’s Determinations With Respect to LFI for
1989 and 1990
Section 183 disallows all expenses attributable to an
activity not engaged in for profit except as provided in section
183(b). Section 183(b)(1) allows those deductions which are not
17Even if we were to reach petitioner’s section 212
argument, we would still conclude on this record that LFI was not
engaged in an activity for profit.
Page: Previous 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 NextLast modified: May 25, 2011