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including those made in the years prior to those at issue, had
yielded what he valued as $32,000 worth of gold, all of which was
stolen in 1995. Thereafter, he accumulated what he estimated to
be $8,400 worth of gold from the time of the theft to the time of
trial. Considering the expenses petitioner claimed for the 3
years at issue with the $8,400 he accumulated in gold, the Court
is skeptical that petitioner achieved a reasonable return.
Petitioner believed that increasing his profitability was simply
a matter of having more time to mine. Yet he did not increase
his time in mining. This factor favors respondent.
The fact that the taxpayer devotes much of his personal time
and effort to carrying on an activity, particularly if the
activity does not have substantial personal or recreational
aspects, may indicate an intention to derive a profit. Daley v.
Commissioner, T.C. Memo. 1996-259; sec. 1.183-2(b)(3), Income Tax
Regs. A taxpayer’s withdrawal from another occupation to devote
most of his energies to the activity may also be evidence that
the activity is engaged in for profit. Sec. 1.183-2(b)(3),
Income Tax Regs.
Because petitioner had a full-time job during the years in
question, his time spent on the gold mining activity was
necessarily limited primarily to weekends and layoff periods.
The record reflects that petitioner spent approximately 39 days
during 1994 and 37 days during 1995 either working on the gold
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