Lucian T. Baldwin, III - Page 37

                                       - 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  Next

Last modified: May 25, 2011