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8. The Financial Status of the Taxpayer
The fact that a taxpayer does not have substantial income or
capital from sources other than an activity may indicate that the
activity is engaged in for profit. See sec. 1.183-2(b)(8),
Income Tax Regs. The fact that a taxpayer does have substantial
income from sources other than an activity, on the other hand,
may indicate that the activity is not engaged in for profit. The
latter is especially true where losses from the activity generate
substantial tax benefits or where there are personal or
recreational elements involved. Sec. 1.183-2(b)(9), Income Tax
Regs.
Petitioner received approximately $229,176 in 1997, $231,587
in 1998, and $276,600 in 1999 in wages from his work as an
emergency room physician. Petitioner averaged $244,000 per year
as a full-time wage earner over the 3-year tax period. The
salary or income for each tax year in question, which petitioner
hoped to offset by claimed losses, indicates that the activity is
not one engaged in for profit. This factor weighs against
petitioner.
9. Elements of Personal Pleasure or Recreation
The absence of personal pleasure or recreation relating to
the activity in question may indicate the presence of a profit
objective. Sec. 1.183-2(b)(9), Income Tax Regs. The mere fact
that a taxpayer derives personal pleasure from an activity,
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