- 8 - and by their upliners, these were merely summary reports and show no independent effort by petitioners to track and/or improve upon the financial progress of the distributorship. Furthermore, petitioners did not make any substantial alterations in an attempt to improve the manner in which they conducted their operations, even after six or more years of losses. We find that this factor favors respondent. 2. The Expertise of the Taxpayer or his Advisers A profit objective may be indicated where the taxpayer carries on an activity in accordance with practices learned from extensive study of accepted business and economic practices, or consultation with experts involved therein. Sec. 1.183-2(b)(2), Income Tax Regs. Petitioners sought the advice of persons who might be considered experts in Amway-related activities. Petitioners attended various events conducted regularly which they believed would provide the expertise necessary to make their distributorship profitable. Although no evidence shows that petitioners sought the advice of experts outside the Amway organization, who might have had a more objective viewpoint regarding business plans and strategies, we find that this factor favors petitioners. 3. Time and Effort Expended by the Taxpayer A profit objective may be indicated where the taxpayer uses much of his personal time and effort to carry on the activity.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011