- 19 - basketball coach. Petitioner was clear that although he wanted to expose his players to talent scouts, his personal goal was to establish and enhance his reputation as a talent scout himself so that he would receive a job offer from an athletic shoe or apparel company. We are convinced that petitioner spent a considerable amount of his personal time on RBS from May through July in each of the years in issue. Nevertheless, because RBS was formed and operated--in great part--for petitioner’s personal objectives, we conclude this factor in favor of respondent’s position. Expectation That Assets Used in Activity May Appreciate The expectation that assets used in the activity will appreciate in value sufficiently to lead to an overall profit when netted against losses may indicate a profit objective. Engdahl v. Commissioner, supra at 668-669. Neither petitioner nor respondent argues that there are any assets involved with RBS, including the value of its reputation, which is significant enough to offset petitioner’s losses. Therefore, we view this factor as neutral to our conclusion. Success of Petitioner in Carrying On Similar Activities The fact that the taxpayer had engaged in similar activities in the past and converted them to profitable enterprises may indicate that he engaged in the present activity for profit. Lundquist v. Commissioner, T.C. Memo. 1999-83, affd. withoutPage: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: November 10, 2007