- 10 -
activity may appreciate in value; (5) the success of the
taxpayers in carrying on similar or dissimilar activities; (6)
the taxpayers’ history of income or loss with respect to the
activity; (7) the amount of occasional profits; (8) the financial
status of the taxpayers; and (9) whether elements of pleasure or
recreation are involved. Golanty v. Commissioner, supra at 426;
sec. 1.183-2(b), Income Tax Regs.
Based on our consideration of these factors and in the light
of the copious record in this case, we conclude that petitioners
have not demonstrated that their photographic activity was
carried on with an actual and honest objective of making a profit
in the taxable years at issue. In reaching our conclusion, we
view the following elements as being most persuasive:
Manner in Which the Taxpayers Carried On the Activity
We believe that the manner in which petitioners carried on
their photography activity does not support a finding that it was
engaged in for profit. In 2001, petitioners only made 14 sales
and of these, at least one-half were made to buyers identified on
petitioners’ records by first name only. Several other entries
were identified by only the buyer’s first name plus the words “at
GM.”
Petitioners testified that the 14 sales in 2001 were not
reflective of their manner of operations because they “actually
solicited to hundreds of potential customers” at various craft
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: November 10, 2007