William Herbert Whitehurst, III and Carla Cherlene Whitehurst - Page 12




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          tournaments was essentially attributable to bad luck, but not to            
          her skills as a bowler, which had improved.  We find her                    
          explanation of the reason for her losses to be reasonable, and we           
          conclude that this factor neither supports nor undercuts the                
          claim that she entered into the bowling activity with a profit              
          objective.  See id.                                                         
               e.  Amount of Occasional Profits, If Any                               
               An opportunity to earn a substantial profit in a highly                
          speculative venture is ordinarily sufficient to indicate that the           
          activity is engaged in for profit even though losses or only                
          occasional small profits are actually generated.  Sec. 1.183-               
          2(b)(7), Income Tax Regs.                                                   
               Mrs. Whitehurst earned prize winnings of $1,528 in 1995,               
          $3,030 in 1996, $3,052 in 1997, $2,725 in 1998, and $889 in 1999,           
          but, as discussed above, her expenses exceeded her winnings.                
          Although she did not win one of the top prizes of $10,000,                  
          $20,000, or $40,000, we are satisfied that she had an objective             
          to win, and we find her testimony to be credible.  Her stated               
          objective is supported by the fact that she would have earned               
          significant prize winnings had she won one or more tournaments              
          that offered a large prize.  See Bolt v. Commissioner, 50 T.C.              
          1007 (1968); Canale v. Commissioner, T.C. Memo. 1989-619; sec.              
          1.183-2(a), Income Tax Regs.  The fact that these tournaments               
          were for amateur bowlers is not relevant because the prize                  






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