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the mental health field. The tapes were 23 minutes in length and
were about “living in the community with self-respect”.
Petitioner “sold these both by mail and by going around to
different mental health centers and different shows”. These
videotapes were “available for $20 plus tax or by mail for $24
total”. By 1999, petitioner realized that selling the videotapes
was not profitable, so he began a new activity involved in
“developmental research” in the mental health field. This
activity involved research into the question “What is the
immediate effect of using spiritual sayings and thoughts with
persons who have experienced a recent mental health crisis?”
Petitioner hopes to use the results of this research to open an
office and offer counseling services.
The following is the application of the section 183 factors
to petitioner’s mental health services and developmental research
activities.
Manner in Which the Taxpayer Carries On the Activity
A profit objective may be indicated where the taxpayer
operates the activity in a businesslike manner and keeps complete
and accurate books and records. Sec. 1.183-2(b)(1), Income Tax
Regs. A change of operating methods in a manner consistent with
an intent to improve profitability may also indicate a profit
objective. Id. There is no suggestion that petitioner kept
books and records of any type, or that petitioner otherwise
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