- 16 -
and an example of the ledger that Mrs. Schwartz maintained were
provided.
Further, during the years in issue, petitioners attempted to
improve the profitability of Diane Racing through various
methods, including hiring paid crew only when needed, entering
local races in order to lower the Diane’s transportation costs,
refinancing the Diane, lowering the Diane’s insurance rates,
changing to a free storage location for the Diane’s equipment,
and modifying the Diane in order to meet the new international
racing rules. Additionally, petitioners sent mass promotional
mailings with followup phone calls, advertised, and created a Web
site for the Diane in order to find sponsors and customers.
Expertise of Petitioners or Their Advisers
A taxpayer’s expertise, research, and study of an activity,
as well as his consultation with experts, may be indicative of a
profit intent. Sec. 1.183-2(b)(2), Income Tax Regs. Mr.
Schwartz’s expertise in boats and research of the 50-foot boat
industry indicate a profit intent.
Mr. Schwartz has been sailing since the 1960s. Prior to the
Diane, Mr. Schwartz owned at least five other boats of various
sizes and capabilities. The parties provided the sailing resumes
of petitioners and Benjamin and extensive list of readings
regarding the sailboat industry in petitioners’ library. We have
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011