Ronald L. Heidrick - Page 10




                                        - 9 -                                         

          affg. Lahr v. Commissioner, T.C. Memo. 1984-472; sec. 1.183-2(a),           
          Income Tax Regs.                                                            
               A nonexclusive list of factors set forth in the income tax             
          regulations guides the section 183 analysis by providing relevant           
          facts and circumstances to be considered in determining whether             
          the requisite profit objective has been shown.  These factors               
          include: (1) The manner in which the taxpayer carried on the                
          activity; (2) the expertise of the taxpayer or his advisers; (3)            
          the time and effort expended by the taxpayer in carrying on the             
          activity; (4) the expectation that assets used in the activity              
          may appreciate in value; (5) the success of the taxpayer in                 
          carrying on similar or dissimilar activities; (6) the taxpayer’s            
          history of income or loss with respect to the activity; (7) the             
          amount of occasional profit, if any, which is earned; (8) the               
          financial status of the taxpayer; and (9) whether elements of               
          personal pleasure or recreation are involved.  Sec. 1.183-2(b),             
          Income Tax Regs.                                                            
               Although no one factor is conclusive, a record of                      
          substantial losses over many years and the unlikelihood of                  
          achieving a profit are indicative that an activity is not engaged           
          in for profit.  Hildebrand v. Commissioner, 28 F.3d 1024, 1027              
          (10th Cir. 1994), affg. Krause v. Commissioner, 99 T.C. 132                 
          (1992).  In evaluating the foregoing factors, the Court may                 
          consider evidence from years subsequent to the years in issue “to           





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011