- 14 -
those tournaments sponsored by B.A.S.S. or FLW Outdoors with the
largest prize payouts, petitioner has chosen to limit his
possibilities for income to the most prestigious bass fishing
competitions. The unfortunate, yet foreseeable, result of this
self-imposed limitation is that petitioner has never earned a
profit from his bass fishing activity, and there is no indication
as to when or whether he will ever attain a profit.
A taxpayer’s financial status may imply whether an activity
is conducted for profit. Sec. 1.183-2(b)(8), Income Tax Regs.
Petitioners reported wage income for taxable year 2001 of $90,757
and $518 in interest income. Substantial income from other
sources might indicate a tax incentive for incurring expenditures
related to a recreational business. Jackson v. Commissioner, 59
T.C. 312, 317 (1972). While it is unclear that the tournament
bass fishing activity was conducted to generate tax savings,
petitioners’ income indicates that they possessed sufficient
disposable income to sustain such losses each year from the
activity and realize tax savings therefrom.
Finally, the presence of personal motives may indicate that
the activity is not engaged in for profit. Sec. 1.183-2(b)(9),
Income Tax Regs. Petitioner’s bass fishing activity has allowed
him to devote a substantial portion of his spare time to a hobby
he has loved since childhood. Further, the activity has
permitted petitioner to test his fishing skills against other
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