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for all his expenses. These records mainly consisted of canceled
checks, some store receipts, a significant number of handwritten,
self-prepared, or “general purposes” receipts, and calendars for
1994 and 1995 with notations indicating locations, mileage, and a
few expenses on given dates. Some of these expense records were
obviously prepared for trial. Unlike the taxpayer in Harrison v.
Commissioner, supra, petitioner did not keep records
contemporaneously with his expenditures, at least not
consistently. No calendar for 1996 was introduced into evidence.
The manner in which petitioner kept records of his activity
was not, in the traditional sense, businesslike. The conclusion
reached in Massingill v. Commissioner, T.C. Memo. 1996-162, affd.
without published opinion 156 F.3d 1237 (9th Cir. 1998), also
applies here: “Petitioner’s compendium is not an adequate
substitute for books or records of income and expenses.”
The nonbusinesslike manner in which petitioner conducted his
gold mining activity weighs against him in the determination of
whether the activity was carried on for profit. Even with due
recognition of the speculative nature of gold mining and
prospecting, petitioner did not demonstrate that he kept the
kinds of books and records that would have enabled him to
evaluate the financial condition of his mining activities. Nor
did petitioner use his records to optimize profitability. In
Tinnell v. Commissioner, T.C. Memo. 2001-106, the Court stated:
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