Michael D. and Suzan L. Storer - Page 16

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          (Easter), May 28 (Memorial Day), September 3 (Labor Day), or                
          November 22 (Thanksgiving Day).                                             
               Our examination of the entire year’s worth of daily entries,           
          moreover, shows that almost 80 percent of Mr. Storer’s time was             
          spent either reading the monthly installments of a limited number           
          of photography magazines5 and books or shopping at retail stores.           
               Finally, were we to believe that the entries accurately                
          reflect the time petitioners spent cultivating photography into a           
          viable business, the time spent is grossly inverse to the actual            
          sales made in the years at issue.                                           
          The Taxpayers’ History of Losses and Financial Status                       
               First, since 1996, petitioners’ claimed Schedule C business            
          losses have exceeded $13,000 in each year, while their gross                
          receipts from that same time never exceeded $1,600.  Petitioners            
          have never earned a profit.                                                 
               Petitioners cite our decision in Churchman v. Commissioner,            
          68 T.C. 696, 701 (1977), to support their contention that the               
          years of losses which preceded the years in issue should not                
          dictate our determination of whether their activity in 2000 and             
          2001 was conducted with the objective of making a profit.  As               
          further support, petitioners argue that their losses were offset            

               5 For example, in January 2001, petitioner spent 14 hours              
          reading “Shutterbugmagazine, 8 hours reading “Outdoor                     
          Photography” magazine, and 8 hours shopping at Circuit City and             

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Last modified: November 10, 2007