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We conclude that petitioner did not operate his Reliv
activity in a businesslike manner. This factor weighs heavily in
respondent’s favor.
2. Expertise of Petitioner
Before becoming involved with Reliv, petitioner had no sales
or network marketing experience. He read some books and
consulted with other persons involved with Reliv, whom he
concedes were not experts, but there is no evidence that he
sought the expertise of qualified, disinterested third parties.
This factor favors respondent.
3. Time and Effort Expended in Carrying On the Activity
Time and effort expended in carrying on an activity may be
indicative of a profit objective, particularly in the absence of
substantial personal or recreational elements associated with the
activity. Sec. 1.183-2(b)(3), Income Tax Regs. A taxpayer’s
withdrawal from another occupation to devote most of his energies
to the activity may evidence a profit objective. Id. Petitioner
spends several hours each week on his Reliv activity. As
discussed elsewhere in this opinion, we are not convinced that
there are no personal elements in this activity, especially
considering that all of his customers have been family members.
Moreover, petitioner pursued his Reliv activity while continuing
to work full time at Abbott, 5 days a week. This factor favors
respondent.
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Last modified: March 27, 2008