David M. Sears and Carol L. McCabe - Page 14

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         claim that petitioners entered into the activity with a profit               
         objective.  See sec. 1.183-2(b)(2), Income Tax Regs.                         
         3.  The Time and Effort Expended by the Taxpayer in Carrying On              
         the Activity                                                                 
              The fact that the taxpayer devotes much of his personal time            
         and effort to carrying on an activity may indicate an objective              
         to derive a profit, particularly if the activity does not have               
         substantial personal or recreational aspects.  The taxpayer's                
         withdrawal from another occupation to devote most of his energies            
         to the activity may also be evidence that the activity is engaged            
         in for profit.  Sec. 1.183-2(b)(3), Income Tax Regs.                         
              Mr. Sears maintained a separate full-time job in 2000 but               
         “set up a pretty regular schedule” for his recruiting efforts,               
         often meeting with potential recruits before he went to work.  We            
         have found that maintaining a full-time job in addition to                   
         conducting a purported business activity can be “a positive                  
         factor reflecting * * * [the taxpayer’s] motivation.”  Dickson v.            
         Commissioner, T.C. Memo. 1986-182.  Mr. Sears’s recruiting                   
         efforts, however, often involved dining out or meeting “an old               
         family friend” to discuss RTP.  Because of the substantial                   
         recreational aspects of the activity, this factor is neutral.                
         See sec. 1.183-2(b)(3), Income Tax Regs.                                     










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