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SMSM in chartering the Feadship or in restoring the Feadship for
resale.
Success in Carrying On Other Activities
A taxpayer’s success with other business activities may
indicate a profit objective. Sec. 1.183-2(b)(5), Income Tax
Regs. Petitioner is a successful plastic surgeon, but neither he
nor Mrs. Magassy had engaged in activities relating to owning and
operating a luxury yacht. It appears that petitioner handled
decisions relating to the Feadship quite differently from the
successful manner in which he practiced medicine.
Personal Pleasure or Recreation
The mere fact that a taxpayer derives personal pleasure from
an activity does not constitute a per se demonstration of a lack
of profit objective. Sec. 1.183-2(b)(9), Income Tax Regs.
Conversely, where an activity lacks recreational appeal, a profit
objective may be indicated. Id.
Yachting inherently involves a luxury indulgence, and
petitioners and petitioners’ family members participated in a
number of trips and entertained on the Feadship. The evidence
establishes some significant personal recreational aspects to
petitioner’s and to SMSM’s yachting activity.
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