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no doubt that petitioners have expertise in the sailboat
industry.
Further, petitioners joined the Association specifically to
learn about 50-foot sailboat industry from the professionals in
the field. Mr. Schwartz also consulted with others in the
business who could advise him regarding the expenses involved
with 50-foot sailboats and how to reduce those expenses.
Time and Effort Expended by Petitioners
The fact that the taxpayer devotes much of his personal time
and effort to carrying on an activity may indicate an intention
to derive a profit. Sec. 1.183-2(b)(3), Income Tax Regs.
Petitioners testified that they spent an average of 15 to 20
hours per week on Diane Racing. We find this time spent
indicative of petitioners’ commitment to this endeavor.
Success of Petitioners in Carrying On Other Activities
We have recognized that a taxpayer’s success in other
business activities may indicate a profit objective. See Hoyle
v. Commissioner, T.C. Memo. 1994-592; sec. 1.183-2(b)(5), Income
Tax Regs. We conclude that petitioners’ success in other
sailboat activities (e.g., reselling the Baltic 39 and Baltic 48
at a profit, chartering the Soverel 50) indicates a profit
objective.
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