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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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