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business records regarding petitioner’s airplane activity from
1967 to the time of trial in 2001.
Petitioner’s testimony that during the late 1970s and early
1980s his airplane activity realized some profits was not
corroborated.
Petitioner testified that at the time of trial he employed
three people in his airplane activity and that he had contracts
to build from kits two Glasair airplanes and one Thunder Mustang
airplane for an expected profit of approximately $462,000.
Petitioner, however, did not offer into evidence written
documentation of the above contracts or any employee records to
corroborate petitioner’s testimony.
Petitioner is a highly educated, trained, and experienced
pilot who loves airplanes and who has devoted much of his time
and money to his airplane activity.
We conclude, for the years in issue, that petitioner’s
airplane activity constitutes a hobby and is not to be regarded
as an activity engaged in for profit under section 183.
Accordingly, we sustain respondent’s disallowance of the losses
relating to petitioner’s airplane activity.
Accuracy-Related Penalties
Under section 6662, a 20-percent accuracy-related penalty is
imposed on the portion of any underpayment of tax attributable
to, among other things, negligence or disregard of Federal tax
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