Larry Minnick and Charla Minnick v. Commissioner - Page 12




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          realization of a profit.  We find that these factors favor                  
          respondent.                                                                 
               8. Financial Status of the Taxpayer                                    
               A profit objective may be indicated where the taxpayer does            
          not have substantial income from sources other than the activity.           
          Sec. 1.183-2(b)(8), Income Tax Regs.  Petitioners’ separate wage            
          and salary income provided a substantial source of income apart             
          from the distributorship:  Petitioners’ taxable income from their           
          employment for 1996 and 1997 was in the amount of $67,000 and               
          $72,403, respectively.  We find that this factor favors                     
          respondent.                                                                 
               9. Elements of Personal Pleasure or Recreation                         
               A lack of profit objective may be indicated where there are            
          personal motives for carrying on the activity, especially where             
          the motive is personal pleasure or recreation.  Sec. 1.183-                 
          2(b)(9), Income Tax Regs.  Profit need not be the only objective,           
          however, and personal motives may coexist with an actual and                
          honest intent to derive a profit.  Id.                                      
               The significance of personal motives in this case is                   
          difficult to gauge.  On the one hand, petitioners expended a                
          substantial amount of time in activities, such as driving long              
          distances, which would appear to lack elements of pleasure or               
          recreation.  On the other hand, much of petitioners’ activities             
          involved elements which were very personal in nature, such as               






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