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that his intention in starting and operating RBS was to gain fame
for himself and the players so that he would get a lucrative job
offer and that his players would receive college scholarships and
offers to join professional teams. Petitioner admitted that
although the players were required to pay $300 to participate on
the team, he often did not collect this fee from his players.
Petitioner cannot point to any evidence that can establish that
he intended to derive a profit short of his goal to parlay the
success of one of his players into a lucrative talent-scouting
job for himself with an athletic apparel conglomerate.
In sum, petitioner has introduced little evidence to show
that he operated RBS in a manner similar to other profitable
basketball schools. Although petitioner has shown his efforts to
advertise and maintain a bank account, we are unconvinced that
the bank account at issue was used solely for RBS. Finally, we
conclude that petitioner had no intention of operating RBS during
the years in issue with the intention of making a profit, as he
actually ran the school with highly optimistic and speculative
hopes that he would enroll a player in his school who would bring
him such fame that a job offer for himself would surely follow.
Finally, when a taxpayer changes operating methods, or
abandons unprofitable methods in a manner consistent with an
intent to improve profitability, a profit motive may be
indicated. Sec. 1.183-2(b)(1), Income Tax Regs.
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