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nonexclusive, and the number of factors for or against the
taxpayer is not necessarily determinative, but rather all facts
and circumstances must be taken into account, and more weight may
be given to some factors than to others. Id.; cf. Dunn v.
Commissioner, supra.
As an initial matter, we found petitioners’ testimonies
regarding the yacht activity to be credible. Other witnesses
corroborated their testimonies.
Manner in Which Petitioners Carry On the Activity
The fact that a taxpayer carries on the activity in a
businesslike manner and maintains complete and accurate books and
records may indicate a profit objective. Sec. 1.183-2(b)(1),
Income Tax Regs. A change of operating methods, adoption of new
techniques, or abandonment of unprofitable methods in a manner
consistent with an intent to improve profitability may also
indicate a profit motive. Id.
Petitioners carried on the activity in a businesslike
manner. A separate banking account for Diane Racing was
maintained during the years in issue. Mrs. Schwartz did the
paperwork for Diane Racing, including paying the bills,
maintaining the bank account, and sending out correspondence. At
trial and attached to the stipulation of facts, canceled checks
relating to expenses paid for the Diane during the years in issue
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