Raymond J. and Ilene H. Pavelko - Page 13

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          participation in a research study, an experience which he                   
          believed would in turn help him in conducting his own research.             
               In short, we find that petitioner had a de minimis amount of           
          income in both of the activities during the years in issue.  We             
          find that petitioner’s claimed expenditures in these activities             
          over the course of 4 years, totaling over $100,000, objectively             
          indicates that petitioner did not expect a profit or engage in              
          the activities with an intent to profit.  These factors strongly            
          favor respondent.                                                           
          Financial Status of the Taxpayer                                            
               A profit objective may be indicated where the taxpayer does            
          not have substantial income from sources other than the activity.           
          Sec. 1.183-2(b)(8), Income Tax Regs.  During the years in issue,            
          petitioner was employed on a part-time basis at a halfway house             
          for psychiatric patients.  Petitioner wife was employed by a                
          school district.  Petitioners received combined wage income,                
          interest income, and dividends totaling $35,834, $40,979,                   
          $48,001, and $47,970 in 1996, 1997, 1998, and 1999, respectively.           
          Thus, petitioners had modest but reliable sources of income                 
          during the years in issue.  This factor favors respondent.                  
          Elements of Personal Pleasure or Recreation                                 
               A lack of profit objective may be indicated where there are            
          personal motives for carrying on the activity, especially where             
          the motive is personal pleasure or recreation.  Sec. 1.183-                 

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