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Fox did not renew petitioner’s sponsorship for 1999 nor any later
year. Petitioner expected this sponsorship relationship to
continue and did not foresee the termination of Sac and Fox’s
marketing director, who was his primary contact at Sac and Fox.
Petitioner tried to get another sponsorship. Petitioner
contacted Sac and Fox and two other local casinos seeking
sponsorship but was ultimately unsuccessful. Petitioner
continued to race in 1999 despite lacking a sponsor.
Petitioner determined in 2000 that he could not profitably
continue the drag racing operations without sponsorship and
therefore limited his racing activity and offered his car for
sale, intending to liquidate. Much of petitioner’s racing
activity during 2000 and 2001 was intended to market his car to
sell it. Petitioner also offered his car for sale in the
National Dragster Magazine in 2001.
While there were some elements of personal enjoyment in the
drag racing activity, petitioner also indicated there were
aspects to it that he did not enjoy, including the significant
heat on the track and the multiple layers of protective clothing
required.
Petitioner’s drag racing activity produced a loss for each
year from 1991 through 1997. In 1998, petitioner earned a profit
of $587 on gross receipts of $1,400 plus the $15,000 sponsorship.
Petitioner forecasted a profit of $13,040 for 1999 assuming the
Sac and Fox sponsorship would continue and assuming $5,000 of
race winnings. Petitioner had gross receipts of $550 and a net
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