Larry Minnick and Charla Minnick v. Commissioner - Page 10




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          Sec. 1.183-2(b)(3), Income Tax Regs.  Petitioners devoted                   
          approximately two nights per week, and approximately two weekends           
          per month, to the Amway activity.  This time was spent in                   
          delivering products and in traveling to other individuals’ homes            
          for evening meetings as well as to monthly meetings and quarterly           
          “major functions”.  In addition, petitioners concentrated on                
          recruiting downliners, from whom income could be derived                    
          independently from the direct efforts of petitioners, rather than           
          making direct sales.  We find that this factor favors                       
          petitioners.                                                                
               4. Expectation That Assets Used in the Activity Would                  
          Appreciate in Value                                                         
               Despite a lack of profit from current operations, a profit             
          objective may be indicated where a taxpayer intends to earn an              
          overall profit with income earned from operations together with             
          the appreciation in the value of assets used in the activity.               
          Sec. 1.183-2(b)(4), Income Tax Regs.  The pole barn constructed             
          on petitioners’ property was used temporarily in part for Amway-            
          related purposes.  However, this structure was used for Amway               
          activities only temporarily, and there is no indication that                
          petitioners intended to realize significant appreciation from it.           
          We find that this factor remains neutral.                                   
               5. Taxpayer’s Success in Other Activities                              
               A profit objective may be indicated where the taxpayer has             
          in the past taken similar activities and made them profitable               





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