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literature in magazines, and accesses articles on the Internet to
improve his performance in bass fishing tournaments. Aside from
discussions with his accountant about the bass fishing activity,
petitioner has never consulted any financial advisers or persons
outside the bass fishing industry. His failure to seek objective
advice about the activity is a negative consideration;
nevertheless, his consistent and continued consultation with
successful tournament fishermen coupled with his regular study of
the bass fishing industry is a positive consideration.
If a taxpayer devotes significant time and effort to an
activity, it may indicate that there is a profit objective. Sec.
1.183-2(b)(3), Income Tax Regs. Although petitioner was not
prepared to leave his full-time employment with Grogan’s for an
activity that had no guarantee of success, he consistently
devoted free time and energy to the activity. Since petitioner
was working 40 to 45 hours per week in his regular job, he was
limited in the time and effort he could spend bass fishing.
During the 26 weeks of the year that he fished, petitioner spent
approximately 40 hours per week on the fishing activity. His
time was divided among many different functions, including
studying ways to improve his performance in tournaments, physical
conditioning, practice fishing, maintaining his boat and tackle,
and actual tournament competition. The Court believes that
petitioner devoted significant time and effort to the activity.
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Last modified: May 25, 2011