Christopher Joseph Bush and Robin Leigh Pickering - Page 11

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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-             
               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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