Robert & Diane Schwartz - Page 7




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          contacts in the industry, petitioners were able to recruit a                
          capable, professional crew.                                                 
               The bank records of Diane Racing were originally maintained            
          in Washington, D.C., so Benjamin could oversee the account while            
          he was in Washington, D.C.  Petitioners paid some boat expenses             
          through their personal checking accounts because some expenses              
          needed to be paid immediately and there was a lag time for checks           
          to clear from the bank account in Washington, D.C.  Once Benjamin           
          left Washington, D.C., the bank account was moved to New York.              
               During the years in issue, the Diane participated in four to           
          nine events each season, and each event could involve multiple              
          races.  The Diane received publicity because of its photos in               
          sailing calendars, in a Patagonia catalog, and in a commercial              
          for an Italian deodorant company.                                           
               The crew on the Diane was professionally operated.  To                 
          participate in a race, the Diane required a crew of 15 members.             
          Petitioners’ children had participated as members of the crew;              
          however, they would sail rarely because the children lived in               
          different cities.  Mrs. Schwartz has not stepped aboard the Diane           
          since 1991 because of an arthritic condition.                               
          The Activity                                                                
               Petitioners expected the Diane to make a profit through the            
          following ways:  (1) Obtaining sponsorships that included                   








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Last modified: May 25, 2011