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operated the activities in a businesslike manner. Petitioner did
testify that he abandoned the videotape sales activity after 3 or
more years without success in that activity. However, for at
least 3 full years--while petitioner had nearly zero sales or
other income from the activities while incurring significant
expenses, as discussed in more detail below--petitioner did not
make any changes in his operation of this activity. This factor
favors respondent.
Expertise of the Taxpayer or Advisers
A profit objective may be indicated where the taxpayer
carries on an activity in accordance with practices learned from
extensive study of accepted business and economic practices, or
consultation with experts involved therein. Sec. 1.183-2(b)(2),
Income Tax Regs. There is no suggestion that petitioner studied
accepted business practices or consulted with experts, or that
petitioner was already an expert in the field of mental health
services or mental health research. This factor favors
respondent.
Time and Effort Expended by the Taxpayer
A profit objective may be indicated where the taxpayer uses
much of his personal time and effort to carry on the activity.
Sec. 1.183-2(b)(3), Income Tax Regs. Petitioner did not state
the exact number of hours he dedicated to these activities.
However, we nevertheless are convinced that petitioner spent a
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