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Goode did keep substantial records for Robco, including bids,
invoices, receipts, and other documentation.
While it is true, as respondent points out, that most of the
work Robco performed in 2002 was on a cost basis and that Mr.
Goode, because of his deteriorating health, was unable to devote a
great deal of time or energy to Robco’s affairs, these
circumstances explain why Robco was not profitable in 2002, as
opposed to establishing a lack of profit objective, especially in
the light of Mr. Goode’s success in taking steps to improve
Robco’s performance in later years.
Mr. Goode succeeded in recruiting a family member from
another State to move to Texas to join Robco, with the result that
Robco returned to profitability by 2004. We believe it unlikely
that the family member would have moved and joined Robco if the
member believed Mr. Goode carried on Robco’s activities as a hobby
and not for profit.
The record shows that petitioners had other sources of income
during 2002, and thus petitioners were not reliant on Robco to
generate income to pay their basic living expenses. The record is
equally clear that at its inception, Robco was petitioners’
primary source of income. Nothing in the record leads us to
believe that Robco was transformed from a profit-oriented activity
into a hobby or recreational pursuit. Mr. Goode, the only person
to testify at trial, did not seem to us to be a person who is
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Last modified: November 10, 2007