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profitable. Petitioners set competitive rates for the jet
charter activity, advertised the jet charter activity, and
solicited business from other jet owners. Petitioners kept
voluminous books and records and maintained the FAA certificate
required to sell charters to third parties. Petitioners made
modifications to their business plan to attract more charter
business. Petitioners successfully showed a general trend of
decreasing losses throughout the relevant years, despite negative
publicity and FAA-mandated additional safety requirements for
their jet. Most importantly, we found petitioners’ testimony
reliable and credible.
The nine nonexclusive factors and the facts and
circumstances of this case lead us to conclude that petitioners
engaged in the jet charter activity with the primary, predominant
and principal purpose and intent of realizing an economic profit
independent of tax savings during the relevant years. We
therefore find that petitioners have met their burden of proving
the requisite motive for their jet charter activity.
Accordingly, we do not sustain respondent’s determination in
the notice of deficiency.
To reflect the foregoing in favor of petitioners and the
concessions of the parties,
Decision will be entered
under Rule 155.
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