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Although petitioner, at the time of his purchase in 1990,
may have had an expectation that the Feadship would appreciate in
value, the evidence before us establishes that petitioner had no
such expectation during 1995, 1996, and 1997. In December of
1994, petitioner listed the Feadship for sale at $2.4 million.
As discussed previously, this amount was significantly less than
petitioner’s cumulative purchase and restoration costs relating
to the Feadship.
As stated, petitioner acknowledged that the purpose of
chartering the Feadship in 1995, 1996, and 1997 was to offset the
costs of operating the Feadship while it was listed for sale. As
one of petitioners’ witnesses testified, “if * * * you charter a
boat, you can make a couple of bucks * * *.”
Time and Effort Expended by Petitioners
A profit objective may be indicated by the amount of
personal time and effort a taxpayer devotes to carrying on an
activity. Sec. 1.183-2(b)(3), Income Tax Regs. Petitioner’s
time during the years at issue was largely devoted to his medical
practice, allowing petitioner little time to devote to matters
relating to the restoration and to the charter of the Feadship.
Mrs. Magassy’s efforts relating to the interior design of
the Feadship occurred well after the major costs of the
restoration on the Feadship had been incurred. Her efforts do
not establish an overall profit objective for petitioner or for
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