- 24 - purchase products at a discount as well as claiming business expense deductions for personal expenses. We find this factor to be neutral. In part, Mrs. Smith enjoyed personal or recreational benefits by engaging in this activity. The record suggests that some of her downline distributors were her friends long before their business involvement with Mrs. Smith. In one case, Mrs. Smith even lent $12,000 to a friend in the same year he became a downline distributor for Renaissance. Further, many of Mrs. Smith’s activities included elements of personal recreation, including traveling to different cities and enjoying meals with friends. Finally, Mrs. Smith enjoyed the benefit of being able to claim business expense deductions for personal expenses such as her car and home. There were, however, elements of these marketing activities which seem to lack any indication of personal recreation, including placing advertisements in newspapers to recruit downline distributors and responding to the resulting phone calls inquiring about these opportunities. Thus, we find this factor to be neutral. 10. Conclusion On balance, we find that Mrs. Smith was not engaged in her direct marketing activities with an actual and honest objective of making a profit. We do not lose sight of the fact that one ofPage: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: November 10, 2007