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devotes a substantial portion of his spare time to activities
related to tournament bass fishing, such as upkeep of his boat
and tackle; studying bass fishing from available books,
magazines, videos, and television shows; physical conditioning;
and maintaining books and records.
During the year at issue, petitioner purchased a new fishing
boat for approximately $28,000. Although petitioner already
owned a fishing boat, the new boat is better equipped for
tournament fishing and handling the various waters a bass
fisherman encounters. Despite receiving some prize money from
his fishing activity, petitioner’s expenses for each taxable year
from 1997 through 2001 have exceeded his gross receipts,
resulting in an unbroken series of losses. Prior to 2003,
petitioner did not maintain a separate bank account for his
fishing activity, although he did maintain books and records to
substantiate his income and expenses. Petitioner has never had a
sponsor or sponsors for his activity, and he has funded the bass
activity solely with the earnings from his employment with
Grogan’s. At trial, petitioner could not estimate when his
tournament bass fishing would realize a profit.
In addition to carrying on the bass fishing activity and
their full-time careers, petitioners own three rental properties
and own an interest in Medical Multimedia Group, a partnership.
Those properties realized net losses.
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Last modified: May 25, 2011