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published opinion 211 F.3d 600 (11th Cir. 2000); sec. 1.183-
2(b)(5), Income Tax Regs. Although petitioner has a long history
of playing basketball and working as a game referee, he had not
previously engaged in operating a basketball team. Accordingly,
we view this factor as neutral.
History of Income or Losses With Respect to the Activity
A series of losses during the initial or startup stage of an
activity may not necessarily be an indication that the activity
is not engaged in for profit. Losses that extend beyond the
customary startup stage may indicate that the activity is not
engaged in for profit. Engdahl v. Commissioner, supra at 669;
sec. 1.183-2(b)(6), Income Tax Regs.
From 1998 through 2002, petitioner reported Schedule C
losses totaling $106,562. Petitioner has never reported a
profit for RBS. Petitioner argues that the history of RBS losses
prior to and during the taxable years at issue does not indicate
that he lacked a profit objective because his activity was in its
startup phase.
Petitioner operated RBS for 2 years prior to 2000, the first
taxable year at issue. Petitioner reported losses on his
Schedules C for 1998 and 1999 of $16,000 and $20,000.
Petitioner’s losses thereafter either remained steady or
increased in all of the years in issue. Petitioner has never
reported a profit for RBS. While petitioner is correct in his
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