- 7 -
advisers; (3) the time and effort expended by the taxpayer in
carrying on the activity; (4) the expectation that the assets
used in the activity may appreciate in value; (5) the success of
the taxpayer in carrying on other similar or dissimilar
activities; (6) the taxpayer's history of income or loss with
respect to the activity; (7) the amount of occasional profits
that are earned; (8) the financial status of the taxpayer; and
(9) whether elements of personal pleasure or recreation are
involved.
No single factor is controlling, and we do not reach our
decision by merely counting the factors that support each party's
position. See Dunn v. Commissioner, 70 T.C. 715, 720 (1978),
affd. 615 F.2d 578 (2d Cir. 1980); sec. 1.183-2(b), Income Tax
Regs. Rather, the relevant facts and circumstances of the case
are determinative. See Golanty v. Commissioner, supra at 426.
After considering all the factors, we agree with respondent
that petitioner did not have an actual and honest objective of
making a profit from her Mary Kay activity.
Petitioner did not carry on the activity in a businesslike
manner. See sec. 1.183-2(b)(1), Income Tax Regs. She maintained
no separate checking account for her business and no business
records, except for the automobile mileage log for 1996.
According to her Schedule C, petitioner's returns and
allowances and COGS exceeded her gross receipts for two of the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011