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and a willingness to follow expert advice may indicate a profit
objective. Krebs v. Commissioner, supra. Similarly, preparation
for an activity by study of its accepted business, economic, and
scientific practices, and consultation with those who are expert
therein, may indicate that the taxpayer entered into the activity
for profit. Id.; Pirnia v. Commissioner, supra; sec. 1.183-
2(b)(2), Income Tax Regs. Petitioner read books and periodicals
and attended workshops and conferences to learn about direct
marketing. This factor favors petitioner.
From June 1995 to December 1997, petitioner worked 10 to 20
hours per week on his marketing activity. Respondent concedes
that petitioner spent a significant amount of time on this
activity. Respondent contends that petitioner should have been
doing more than he did, but respondent does not say what else
petitioner should have done. This factor favors petitioner.
Petitioner had no previous success in similar activities.
This factor favors respondent.
Respondent contends that the fact that petitioner had losses
from his marketing activity in 1995, 1996, and 1997 shows that
petitioner did not have a profit objective. We disagree. Losses
incurred during the startup stage of an activity do not indicate
that the activity is not operated for profit if the taxpayer’s
losses were not sustained for a period beyond that which is
reasonably necessary for him or her to achieve a profit.
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