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earned; (8) the financial status of the taxpayer; and (9) whether
elements of personal pleasure or recreation are involved. Sec.
1.183-2(b)(1) through (9), Income Tax Regs. No single factor
controls. Brannen v. Commissioner, 722 F.2d 695, 704 (11th Cir.
1984), affg. 78 T.C. 471 (1982); sec. 1.183-2(b), Income Tax
Regs.
2. Applying the Factors
Respondent contends that the factors in section 1.183-2(b),
Income Tax Regs., favor respondent, except respondent agrees that
the appreciation of assets factor does not apply.
Respondent contends that petitioner did not conduct his
activity in a businesslike manner, keep proper books and records,
or have a business plan. We disagree. A business plan may be
evidenced by actions of the taxpayers where there is no written
business plan. Phillips v. Commissioner, T.C. Memo. 1997-128.
Petitioner’s actions show that he had an informal business plan.
He expected to improve his business by increasing the number of
customers and recruiting more sales representatives. He sought
to identify the best companies with which to do business, the
best products for sale, and the most efficient method for
marketing those products and for recruiting sales
representatives. He expected that his income from his marketing
activity would ultimately replace his wages from the Probation
Department.
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