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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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