Joe Guadagno and Susan Beth Rishel Guadagno - Page 12

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          result merely from comparing the number of factors that suggest a           
          profit motive against the number of factors that suggest the                
          opposite.  See sec. 1.183-2(b), Income Tax Regs.                            
               After careful consideration, we are satisfied that                     
          petitioners did not engage in the sale and distribution of Amway            
          products with the profit objective necessary for that activity to           
          be considered a trade or business within the meaning of section             
          162 during any of the years in issue.7  Our conclusion in this              
          regard is particularly influenced by the following.                         
               Before becoming Amway distributors, petitioners had neither            
          experience with Amway nor experience in running a business.                 
          Nevertheless, they did not seek independent business advice at              
          the outset, and they did not seek independent business advice               
          afterwards even though losses were sustained year after year.               
          Instead, they relied upon other Amway distributors whose advice             
          is more accurately characterized as personal motivational advice            
          than strategic business advice.  Under the circumstances,                   
          petitioners’ failure to seek independent business advice strongly           
          suggests that they were distributing and using Amway products for           
          purposes other than profit.  See Ogden v. Commissioner, T.C.                
          Memo. 1999-397, affd. 244 F.3d 970 (5th Cir. 2001).                         

               7 Although neither party specifically addressed the point,             
          our analysis presumes that respondent bears the burden of proof.            
          See sec. 7491(a).                                                           

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