Warren R. Follum - Page 25




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               Petitioner contends that a small chance of making a large              
          profit may indicate the requisite profit objective.  Sec. 1.183-            
          2(a), Income Tax Regs.  Specifically, petitioner argues that the            
          cash and prizes available per season totaled $1,250,000 and he              
          believed he could earn a profit of $500,0004 per season.                    
          Petitioner does not specify how many or which tournaments he                
          believed he could win to generate this profit.  Petitioner has              
          not persuaded us that he had a chance either to make a profit or            
          to recoup his losses.  The chance to make a large profit factor             
          weighs against petitioner.                                                  
               Substantial income from sources other than the activity,               
          particularly if the losses from the activity generate substantial           
          tax benefits, may indicate that the activity is not engaged in              
          for profit.  Sec. 1.183-2(b)(8), Income Tax Regs.  Although                 
          petitioner was employed by Kodak during the years in issue, his             
          income was not substantial.  The income from other sources factor           
          is neutral.                                                                 
               The presence of personal motives in the carrying on of an              
          activity may indicate that the activity is not engaged in for               
          profit, especially where there are recreational elements                    
          involved.  Sec. 1.183-2(b)(9), Income Tax Regs.  Petitioner                 
          argues that he suffers from severe motion sickness.  Petitioner             

               4Petitioner states that this amount is in “today’s dollars”            
          but does not provide any details regarding his sources of data or           
          present value computations.                                                 






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