John G. and Janice E. Parker - Page 8




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          has personal or recreational elements.  Sec. 1.183-2(b)(8),                 
          Income Tax Regs.                                                            
               Petitioner contends that he engaged in the airplane activity           
          for profit.  We disagree.                                                   
               The evidence does not establish that petitioner carried on             
          his airplane activity in a businesslike manner.                             
               Petitioner has consistently reported substantial net losses            
          from his airplane activity and used the losses to offset                    
          significant wages that petitioner earned from American and                  
          taxable pensions and annuity income.  The uninterrupted,                    
          substantial losses realized in petitioner’s airplane activity               
          over many years are highly indicative of a lack of profit                   
          objective.  See Golanty v. Commissioner, supra at 426.                      
               Petitioner testified that a business plan for his airplane             
          activity was developed in 1996 (namely, to build from kits and to           
          sell airplanes for a substantial profit).  Petitioner, however,             
          did not offer into evidence written documentation of this                   
          business plan.  Petitioner acknowledged that prior to 1996 his              
          airplane activity was “a pencil and paper operation”.                       
               Other than income tax returns, flight logs, and a business             
          license (issued to petitioner during the last month of the last             
          year at issue herein), petitioner did not offer into evidence any           
          written documentation of his business plans or projections,                 
          payroll or other employee records, sales contracts, or any other            






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