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record that petitioner’s experience, or his scant contact with
“experts”, supports his contention that he entered this venture
with the objective of making a profit. McCarthy v. Commissioner,
T.C. Memo. 2000-135; DeMattia v. Commissioner, T.C. Memo. 1998-
87.
It is apparent from the record that petitioner had no reason
to expect appreciation in the value of his agreement with
Jennifer. See sec. 1.183-2(b)(4), Income Tax Regs. Petitioner
spent the majority of his money on the cost of tuition at VSA,
travel, and automobile expenses. The evidence shows that the
only opportunity for petitioner to recoup his investment was
through his agreement with Jennifer securing for himself 10
percent of her dance-related income.
The value of the agreement is at best, speculative.
Jennifer’s NYTB contract paid her approximately $5,200 for a 10-
month dance season.3 Respondent disallowed $13,889 of the
expenses petitioners claimed for Jennifer in 1996. Because her
agreement states that she will repay Aspiring Artists 10 percent
of her dance-related earnings, she would need to earn more than
3 This computation is based on Jennifer’s contract with NYTB
which compensated Jennifer as follows:
Your gross performance compensation will be as
follows: Nutcracker Tour ($300 per week), NYC
Nutcracker season (flat fee of $300). In addition,
during rehearsal periods you will be compensated at the
rate of $100 per week.
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Last modified: May 25, 2011