John E. and Vicki D. Morrissey - Page 5

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          and typically more prize money.  Although the National Hot Rod              
          Association (NHRA) licensed petitioner in the Super Comp                    
          category, petitioner viewed NHRA-sanctioned events merely as                
          opportunities to gain exposure for his sponsor.  The entry fees             
          at NHRA-sanctioned events were higher, the prizes were not as               
          large, and there were many more competitors.                                
               Petitioner prepared detailed budget forecasts and expense              
          estimates for his racing activity for the years at issue, which             
          he modified throughout each year as circumstances changed.                  
          Petitioner also kept a separate checking account for his racing             
          activity.                                                                   
               Petitioner entered eight drag races in 1999, eight drag                
          races in 2000, and six drag races in 2001.  Petitioner’s son also           
          raced petitioner’s car at some races during the years at issue.             
          Although the bank employed petitioner full time during the years            
          at issue, petitioner was able to take the time to attend to the             
          necessary aspects of his racing, such as repairing his car,                 
          contacting sponsors, and participating in races.  The amount of             
          time these activities took varied according to, for example, the            
          amount of repairs needed after a race.  Petitioner’s wife and son           
          also assisted petitioner with these activities on occasion.                 
               Petitioner believed that he owned a quality car and used               
          quality parts in its maintenance.  Petitioner hoped that his car            
          would hold its value as much as possible but did not expect that            








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