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and effort to carrying on the activity may indicate an intent to
profit, particularly if the activity does not have substantial
personal or recreational aspects. Sec. 1.183-2(b)(3), Income Tax
Regs.
The fact that Mrs. Whitehurst has devoted much of her
personal time and effort to bowling generally supports her claim
that she entered into the bowling activity with a profit
objective. See id. Nevertheless, as we discuss in greater
detail below, bowling has substantial personal or recreational
aspects for Mrs. Whitehurst. See id. This factor is neutral.
d. History of Income or Losses
A series of losses during the initial stage of an activity
is not necessarily an indication that the activity is not engaged
in for profit. Sec. 1.183-2(b)(6), Income Tax Regs. However,
continued losses which cannot be explained may be indicative that
the activity is not engaged in for profit. Id.
Mrs. Whitehurst did not earn prize winnings in excess of her
expenses during the 5 years that she engaged in the bowling
activity. Petitioners claimed a loss of $4,712 for 1995 and a
loss of $12,038 for 1996 with respect to the bowling activity.
Her bowling scores had improved and were better in 1999 than they
were in 1997 and her handicap was lower, yet she won fewer
tournaments that offered large prize winnings and received less
prize money. She explained that her lack of success in winning
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