- 12 - None of the assets used in petitioner’s bass fishing activity are likely to appreciate in value, and, for that matter, petitioner did not accumulate any assets with the expectation that they would appreciate in value. Sec. 1.183-2(b)(4), Income Tax Regs. A taxpayer’s previous success in other entrepreneurial activities similar or dissimilar to the activity in question may indicate that a profit objective exists. Sec. 1.183-2(b)(5), Income Tax Regs. Petitioner experienced some financial success with Fayette, a school supply company that he formed in 1977 and operated through 1987. More notable, however, are petitioner’s entrepreneurial activities associated with the bass fishing activity at issue. Petitioner completely terminated Sportsman’s Supply, a retailer of sporting goods and fishing tackle, when the entity failed to generate net earnings in its first 2 years of operation. Similarly, petitioner created a Web site in the hope of enhancing profitability yet abandoned this project when the site did not produce anticipated activity. Even though petitioner’s bass fishing activity has never generated net earnings, he has nevertheless continued the activity since 1997. Given petitioner’s history of promptly ending unprofitable business ventures, his unwillingness to cease tournament bass fishing, an activity that produced losses exclusively, indicates that the bass fishing activity was not engaged in for profit.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011