- 18 -
illustrates that his personal goal was not a realistic one. We
conclude that had he sought out advice on whether he could
realistically start and parlay a profitable youth basketball
school in Chicago into a lucrative job offer for himself, he
would not have endeavored to make RBS a business.3 In sum, our
conclusion with respect to this factor weighs in favor of
respondent.
Time and Effort Petitioner Expended 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 intention
to derive a profit, particularly if the activity does not have
substantial personal or recreational aspects. Golanty v.
Commissioner, 72 T.C. at 426; sec. 1.183-2(b)(3), Income Tax
Regs.
Petitioner testified that he spent approximately 2 hours
conducting weekly practice from May through July of each of the
years in issue, and approximately 5 hours each of those weeks on
administrative tasks related to RBS. In addition, petitioner
would spend upwards of 12 hours a day on the days that the RBS
team would participate in tournaments.
Petitioner testified that he took pleasure in watching his
players and in the reputation he was building as a youth
3 We note that, in 2004, petitioner applied for, and
received, sec. 501(c)(3) status to operate RBS as a charitable
entity.
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: November 10, 2007