T.C. Memo. 2000-178
UNITED STATES TAX COURT
KENNETH J. NISSLEY AND TERRI C. CONNOR-NISSLEY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20757-98. Filed May 30, 2000.
W. Curtis Elliott, Jr., William R. Culp, Jr.,
and Niles A. Elber, for petitioners.
Timothy S. Sinnott, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
ARMEN, Special Trial Judge: Respondent determined
deficiencies in petitioners’ Federal income taxes for the taxable
years 1994, 1995, and 1996 in the amounts of $9,189, $9,446, and
$7,495, respectively.
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The issue for decision by the Court is whether petitioners
engaged in their Amway activity for profit within the meaning of
section 183.1 We hold that they did not.
FINDINGS OF FACT
Some of the facts have been stipulated, and they are so
found. Petitioners resided in Indianapolis, Indiana, at the time
that their petition was filed in this case.
Petitioner husband (Mr. Nissley) graduated in 1982 with a
bachelor of science degree in accounting from Manchester College
in North Manchester, Indiana. He was licensed as a certified
public accountant (C.P.A.) in 1982. Thereafter, from 1982
through 1987 he worked as a staff auditor, a senior auditor, and
ultimately as an audit manager for the Big 5 accounting firm of
Price Waterhouse.
Since January 1988, Mr. Nissley has been employed on a full-
time basis (40-50 hours per week) as the director of information
systems and planning and procurement for Creative Expressions
Group, Inc. of Indianapolis, Indiana. His salary for 1994, 1995,
and 1996 was $65,674, $67,916, and $70,810, respectively.
1
All section references are to the Internal Revenue Code,
in effect for the taxable years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure. All
amounts are rounded to the nearest dollar.
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Petitioner wife (Mrs. Nissley) graduated in 1983 with a
bachelor of science degree in accounting from Indiana University.
She was licensed as a C.P.A. in 1985.
Upon graduating from college, Mrs. Nissley began employment
with Price Waterhouse, where she worked full time, providing
consulting services (related to financial systems) to Fortune 500
companies. At the time that she resigned from the firm in 1991,
she was a senior manager.
After her resignation from Price Waterhouse and through the
middle of 1994, Mrs. Nissley served as the director of
information systems for Administar Information Technologies of
Indianapolis, Indiana, earning $57,467 in 1994. Thereafter,
through the end of 1994, Mrs. Nissley was self-employed as a
business consultant, earning a net profit of $23,193 (based on
gross receipts of $31,735 and total expenses of $8,542) for that
year. Her combined salary and net profit from self-employment in
1994 was $80,660.
In January 1995, Mrs. Nissley obtained a full-time position
as president and chief executive officer of Pathway Family Center
of Southfield, Michigan (Pathway), a nonprofit, health-care
organization dedicated to the treatment and prevention of
substance abuse by adolescents. Mrs. Nissley continued to hold
this position at the time of trial (November 1999). Her salary
for 1995 and 1996 was $75,010 per year.
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During the years in issue, petitioners operated an Amway
distributorship under the name of “KT Enterprises”. Petitioners
began their Amway activity in May or June 1991, when they were
recruited as “downline” distributors by an “upline” distributor.
At the time of trial, petitioners were continuing to pursue their
Amway activity.
Amway is a supplier of household and personal use products
that are sold by individuals (distributors) through direct
marketing. An Amway distributor purchases Amway products for
resale to both customers and “downline” distributors, as well as
for personal use.
At least in theory, Amway distributors generate receipts by
selling Amway products directly to customers and by recruiting
new distributors. The new recruits become “downline"
distributors of the sponsoring distributor and a part of his or
her organization. (The sponsoring distributor is referred to as
the “upline” distributor.) In turn, each “downline” distributor
is encouraged to sponsor additional new distributors, all of whom
become a part of the initial distributor’s organization. (The
process of recruiting new distributors is often referred to as
“building the legs” of a distributor's network.) Amway does not
assign exclusive geographical territories to any distributor, nor
does Amway impose a minimum sales quota on any distributor.
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Amway maintains a “pyramid” incentive system. Under this
system, an “upline” distributor receives a bonus based on the
volume of sales generated by his or her “downline” distributors.2
Thus, the system presumes that the “upline” distributor’s
potential for profit will increase as his or her network of
“downline” distributors becomes wider and deeper.3
Because the “upline” distributor’s bonus is based on the
volume of sales generated by “downline” distributors, such bonus
is not directly affected by a “downline” distributor’s
profitability or lack of profitability.
The Amway “pyramid” incentive system is promoted by Amway in
the form of the “6-4-2 plan”. Under the “6-4-2 plan”, each Amway
distributor is encouraged to personally recruit 6 “downline”
distributors, each of whom in turn is encouraged to recruit at
least 4 “downline” distributors, each of whom in turn is
encouraged to recruit at least 2 “downline” distributors (for a
total of 78 “downline” distributors in the initial distributor’s
organization). Amway promotes the “6-4-2 plan” as the
2
The “upline” distributor’s bonus is also based on the
volume of sales generated by the “upline” distributor himself or
herself. However, the volume of such sales is generally minimal,
and the portion of the bonus attributable to such sales is
negligible.
3
The “width” of a network refers to the number of
“downline” distributors that are personally sponsored by the
distributor in question, and “length” refers to the number of
“downline” distributors that make up each “leg” of the network.
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theoretical break-even point for a distributorship, assuming that
the distributor and each “downline” distributor within the
distributor’s organization purchases $200 of Amway products per
month, and that the distributor does not have expenses exceeding
$2,000 per month. At least in theory, the potential for profit
is enhanced as each of the 78 “downline” distributors in the
distributor’s network successfully implements the “6-4-2 plan”.
The Amway “6-4-2 plan” does not provide meaningful guidance
to distributors regarding how expenses incurred in pursuing an
Amway activity might be reduced.
The structure of the Amway “pyramid” incentive system
effectively serves to discourage distributors from spending their
time personally trying to sell Amway products. In contrast, the
system effectively serves to encourage distributors to spend
their time trying to recruit an ever-increasing number of
“downline” distributors. Petitioners themselves spent little
time personally trying to sell Amway products and concentrated
instead on trying to recruit (and retain) “downline”
distributors.4 Gross income received by petitioners consisted
principally of bonuses earned from the sale (or personal
consumption) of Amway products by “downline” distributors.
4
At the end of 1994, 1995, and 1996, petitioners had a
total of 75, 77, and 79 “downline” distributors, respectively, in
their organization.
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As Amway distributors, petitioners were entitled to purchase
for their personal use Amway products at distributor’s cost
without the customary 30-percent markup. In 1994, 1995, and
1996, petitioners purchased Amway products valued at $2,133,
$3,282, and $3,786, respectively, for their personal use.
Since inception, petitioners have treated their Amway
activity as a proprietorship on Schedule C, Profit or Loss From
Business, of their Federal income tax return. Petitioners
describe their activity on Schedule C as “product distribution”
but do not identify the activity as an Amway distributorship.
Petitioners have never succeeded in earning a profit from
their Amway activity. Rather, petitioners have consistently
claimed losses from their Amway activity and have used such
losses to offset their other income, principally salary (or net
profit from business consulting) from their full-time positions.
The following schedule reflects the losses claimed by petitioners
from their Amway activity on Schedule C of their tax returns for
1991 through 1998:
Year Net Loss
1991 (part year) $ 10,258
1992 27,726
1993 19,705
1994 27,407
1995 33,539
1996 27,787
1997 22,225
1998 19,107
$187,754
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At the time of trial (November 1999), petitioners anticipated
that for 1999, they would once again incur a loss from their
Amway activity.
Petitioners determined their net losses from their Amway
activity on Schedule C of their tax returns for 1991 through
1998 as follows:
1991 1992 1993 1994
Gross income1 $ 2,796 $11,387 $19,691 $ 5,609
Less: expenses
(incl. home office) 13,054 39,113 39,396 33,016
Net loss $10,258 $27,726 $19,705 $27,407
1995 1996 1997 1998
Gross income1 $12,524 $17,129 $ 7,302 $ 7,584
Less: expenses
(incl. home office) 46,063 44,916 29,527 26,691
Net loss $33,539 $27,787 $22,225 $19,107
1
For petitioners, gross income was essentially the
bonuses earned from the sale (or personal consumption)
of Amway products by “downline” distributors.
Petitioners themselves sold relatively few Amway
products, although they did order such products
on behalf of “downline” distributors.
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Petitioners claimed expenses related to their Amway activity
on Schedule C of their tax returns for 1991 through 1998 as
follows:
1991 1992 1993 1994
Bad debts --- --- --- $ 835
Car expenses --- $ 8,170 $10,173 6,794
Commissions/fees $ 1,083 5,064 8,286 4,379
Interest expense --- --- --- 672
Office expense 2,497 5,478 10,646 6,587
Repairs --- 62 --- ---
Supplies 4,257 7,875 1,517 —
Travel 4,915 7,637 5,633 4,858
Meals/entertainment1 302 794 1,024 1,002
Utilities --- --- --- 4,861
Other expenses
Awards/gifts --- 57 --- ---
Books/subscriptions/
tapes --- --- --- 369
Seminars --- 1,384 --- 1,394
Use of home 2,592 2,117 1,265
Total expenses $13,054 $39,113 $39,396 $33,016
1
Net after 20 percent reduction for 1991-93 and
50 percent reduction for 1994 per sec. 274(n).
1995 1996 1997 1998
Advertising $ 2,078 $ 326 $ 1,105 $ 952
Car expenses 13,214 11,070 8,604 7,839
Commissions/fees 6,461 5,152 864 ---
Depreciation 679 517 539 ---
Interest expense 488 --- 458 423
Legal/professional --- --- 310 ---
Office expense 8,371 11,026 5,796 5,942
Supplies 676 3,985 3,712 4,856
Travel 6,664 5,287 4,596 3,872
Meals/entertainment1 2,125 1,466 1,496 989
Other expenses
Books/subscriptions/
tapes 992 884 --- ---
Seminars 1,805 2,376 2,047 1,818
Uniforms --- 342 --- ---
Use of home 2,510 2,485 --- ---
Total expenses $46,063 $44,916 $29,527 $26,691
1
Net after 50 percent reduction for 1995-98
per sec. 274(n).
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For the years in issue, petitioners claimed “car expenses”
for a 1993 Oldsmobile and/or a 1994 BMW 535i based on claimed
“business” miles driven. Petitioners reported “business” miles,
commuting miles, and other mileage on Schedule C of their tax
returns for the years in issue as follows:
1994 1995 1996
“Business” miles 23,398 38,277 29,945
Commuting 4,320 3,000 3,000
Other 2,603 2,456 4,957
Total 30,321 43,733 37,902
Petitioners claimed deductions for the cost of attending
Amway conventions and seminars on a regular basis in cities such
as New York, Denver, Atlanta, Orlando, and Minneapolis.
At the time that petitioners were recruited as Amway
distributors in mid-1991, they had no prior experience with the
Amway-type of activity. Since that time, they have relied only
on advice from one of their “upline” distributors and other
interested Amway individuals.
Other than accepting the Amway “6-4-2 plan”, petitioners did
not maintain a written business plan for their Amway activity,
nor did they maintain a written budget for the activity.
Petitioners did not prepare a break-even analysis for their Amway
activity, nor did they maintain a monthly report of expenses
incurred in pursuing the activity.
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A major reason why many individuals remain committed to
Amway is the congenial sense of family and the gratifying
motivational feeling that they derive from participating in the
activity.
Petitioners have “no intentions of getting out of * * *
Amway”.
OPINION
Under section 183(a), if an activity is not engaged in for
profit, then no deduction attributable to the activity shall be
allowed except to the extent provided by section 183(b). In
pertinent part, section 183(b) allows deductions to the extent of
gross income derived from an activity that is not engaged in for
profit.
Section 183(c) defines an activity not engaged in for profit
as “any activity other than one with respect to which deductions
are allowable for the taxable year under section 162 or under
paragraph (1) or (2) of section 212". Deductions are allowable
under section 162 or under section 212(1) or (2) if the taxpayer
is engaged in the activity with the “actual and honest objective
of making a profit”. Ronnen v. Commissioner, 90 T.C. 74, 91
(1988); Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd.
without opinion 702 F.2d 1205 (D.C. Cir. 1983).
The existence of the requisite profit objective is a
question of fact that must be decided on the basis of the entire
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record. See Benz v. Commissioner, 63 T.C. 375, 382 (1974). In
resolving this factual question, greater weight is accorded
objective facts than a taxpayer's statement of intent. See
Westbrook v. Commissioner, 68 F.3d 868, 875-876 (5th Cir. 1995),
affg. T.C. Memo. 1993-634; sec. 1.183-2(a), Income Tax Regs. For
purposes of deciding whether the taxpayer has the requisite
profit objective, profit means economic profit, independent of
tax savings. See Surloff v. Commissioner, 81 T.C. 210, 233
(1983). The taxpayer bears the burden of proving that he or she
engaged in the activity with the objective of making a profit.
See Rule 142(a); INDOPCO Inc. v. Commissioner, 503 U.S. 79, 84
(1992); Welch v. Helvering, 290 U.S. 111, 115 (1933); Elliott v.
Commissioner, 90 T.C. 960, 971 (1988), (“Petitioners bear the
burden of proving that they engaged in the Amway distributorship
with the intent to make a profit”) affd. without published
opinion 899 F.2d 18 (9th Cir. 1990).
The regulations set forth a nonexhaustive list of factors
that may be considered in deciding whether a profit objective
exists. These factors are: (1) The manner in which the taxpayer
carries on the activity; (2) the expertise of the taxpayer or his
advisers; (3) the time and effort expended by the taxpayer in
carrying on the activity; (4) the expectation that the assets
used in the activity may appreciate in value; (5) the success of
the taxpayer in carrying on other similar or dissimilar
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activities; (6) the taxpayer's history of income or losses with
respect to the activity; (7) the amount of occasional profits, if
any, which are earned; (8) the financial status of the taxpayer;
and (9) any elements indicating personal pleasure or recreation.
See sec. 1.183-2(b), Income Tax Regs.
No single factor, nor even the existence of a majority of
factors favoring or disfavoring the existence of a profit
objective, is controlling. See id. Rather, the relevant facts
and circumstances of the case are determinative. See Golanty v.
Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981).
Based on all of the facts and circumstances in the present
case, we hold that petitioners have failed to prove that they
engaged in their Amway activity for profit within the meaning of
section 183. See Rule 142(a); INDOPCO, Inc. v. Commissioner,
supra; Welch v. Helvering, supra; Elliott v. Commissioner, supra.
We will not analyze in depth all 9 of the factors enumerated
in the regulation but rather focus on some of the more important
ones that inform our decision.
First, the history of consistent and substantial losses
incurred by petitioners in their Amway activity is indicative of
a lack of profit objective. See Golanty v. Commissioner, supra
at 427; sec. 1.183-2(b)(6), Income Tax Regs. Since the inception
of their Amway activity in mid-1991, petitioners have never
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earned a profit but have incurred losses for 8 consecutive years.
Indeed, at the time of trial in November 1999, petitioners
expected to incur another loss for what would be the ninth
consecutive year.
Moreover, petitioners’ losses have been substantial in
amount, ranging between $19,107 and $33,539 for each of the 7
years during which petitioners have conducted their Amway
activity for a full 12 months. Indeed, petitioners’ aggregate
losses for the 7-1/2-year period from mid-1991 through 1998
amount to $187,754 and average over $25,000 on an adjusted annual
basis.
Further, there has not been any significant trend
discernible in the history of petitioners’ losses. For 1994
through 1996, the 3 taxable years in issue, petitioners incurred
losses of $27,407, $33,539, and $27,787, respectively. While it
is true that petitioners’ losses have decreased since 1996, it is
also true that a comparison of 1997 and 1996 demonstrates that
petitioners’ gross income decreased at a faster rate (57 percent)
than did petitioners’ expenses (34 percent). The same is true
when 1998 and 1996 are compared.
Also relevant is the fact that “the goal must be to realize
a profit on the entire operation, which presupposes not only
future net earnings but also sufficient net earnings to recoup
the losses which have meanwhile been sustained in the intervening
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years.” Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965),
affd. 379 F.2d 252 (2d Cir. 1967). In the present case, there is
no persuasive evidence that petitioners will enjoy “future net
earnings”, much less that petitioners will be able to recoup the
substantial losses ($187,754 through 1998) “which have meanwhile
been sustained”.
Second, we are not convinced that petitioners conducted
their Amway activity in a businesslike manner. See sec. 1.183-
2(b)(1), Income Tax Regs. Although petitioners may have
maintained a separate bank account and records for their Amway
activity, such bank account and records appear to have been
maintained principally to satisfy substantiation requirements
imposed by the Internal Revenue Code and thus to “guarantee” the
deductibility of expenses. In contrast, such bank account and
records do not appear to have been used as analytic or diagnostic
tools in an effort to achieve profitability of petitioners’ Amway
activity. As we have previously stated:
the keeping of books and records may represent nothing
more than a conscious attention to detail. In this
case, there has been no showing that books and records
were kept for the purpose of cutting expenses,
increasing profits, and evaluating the overall
performance of the operation. The petitioner reviewed
her records, but she has failed to show that she used
them to improve the operation of the enterprise.
[Golanty v. Commissioner, supra at 430.]
Moreover, petitioners did not maintain certain types of
records, nor did petitioners employ certain elementary business
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practices, that one would expect of individuals pursuing an
activity with a profit objective. See Ogden v. Commissioner,
T.C. Memo. 1999-397; Theisen v. Commissioner, T.C. Memo. 1997-
539; Hart v. Commissioner, T.C. Memo. 1995-55. Thus, petitioners
did not maintain any written business plan for their Amway
activity (other than the Amway “6-4-2 plan”). Further,
petitioners did not maintain either a written budget or a monthly
report of expenses, nor did petitioners prepare a break-even
analysis.
Also of significance is the fact that petitioners had no
experience with the Amway-type of activity prior to the time that
they were recruited by an Amway distributor. See sec. 1.183-
2(b)(2), Income Tax Regs. Since that time, petitioners have
relied only on advice from one of their “upline” distributors and
other interested Amway individuals. Yet, under the Amway system,
the “upline” distributor’s bonus is not directly affected by the
“downline” distributor’s profitability or lack of profitability;
rather, it is the “downline” distributor’s volume of sales that
is important to the “upline” distributor. Nevertheless,
petitioners have steadfastly refused to seek counsel from
disinterested third parties regarding means by which their Amway
activity might be made profitable. See Poast v. Commissioner,
T.C. Memo. 1994-399 (“for the most part, petitioners’ advisers
were not experts as much as they were upliners with a financial
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stake in petitioners’ retail and downline sales.”); Ogden v.
Commissioner, supra (“Amway distributors may be biased when
discussing Amway because they have a natural desire to advance
the organization and/or obtain income from a downliner.”).
Petitioners have steadfastly refused to seek counsel from
disinterested third parties, even though the advice they have
received from interested Amway individuals has done nothing to
reverse petitioners’ history of uninterrupted and substantial
losses. Furthermore, the record suggests that the “advice”
petitioners received has consisted of little more than
platitudes, generalities, and encouragement to “stick with it”.
Also noteworthy is the fact that after her resignation from
Administar Information Technologies in mid-1994, Mrs. Nissley was
able to generate immediately a net profit as a self-employed
business consultant, earning $23,193 based on gross receipts of
$31,735 and total expenses of $8,542, for the last 6 months of
1994. By contrast, in their Amway activity, petitioners have
incurred nothing but substantial losses for 8 consecutive years.
Third, section 1.183-2(b)(8), Income Tax Regs., provides in
part that “Substantial income from sources other than the
activity (particularly if the losses from the activity generate
substantial tax benefits) may indicate that the activity is not
engaged in for profit especially if there are personal or
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recreational elements involved.” Golanty v. Commissioner, 72
T.C. at 428-429; see Ransom v. Commissioner, T.C. Memo. 1990-381.
In the present case, petitioners are well-educated,
professional individuals, licensed as C.P.A.’s, who earn
substantial salaries from their full-time employment, as
demonstrated by the following table for the years in issue:
1994 1995 1996
Mr. Nissley $ 65,674 $ 67,916 $ 70,810
Mrs. Nissley 80,660 75,010 75,010
Total $146,334 $142,926 $145,820
For 1994, 1995, and 1996, petitioners claimed losses from
their Amway activity in the amounts of $27,407, $33,539, and
$27,787, respectively. Petitioners used those losses to reduce
their compensation and other income, thereby decreasing their
taxable income and achieving substantial tax savings. Those tax
savings helped to finance everyday expenses such as outlays for
car and home.5
5
For 1994, 1995, and 1995, petitioners deducted car
expenses in the amounts of $6,794, $13,214, and $11,070,
respectively. For each of the first two of those years, the
amount deducted for just this single expense exceeded
petitioners’ reported gross income from Amway for the year.
For 1994, 1995, and 1996, petitioners also claimed
deductions for use of home in the amounts of $1,265, $2,510, and
$2,485, respectively; for 1994, they also claimed a deduction for
utilities in the amount of $4,861. For 1994, the sum of just
these two deductions exceeded petitioners’ reported gross income
from Amway for that year.
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Finally, this Court has observed that “there are significant
elements of personal pleasure attached to the activities of an
Amway distributorship” and that “an Amway distributorship
presents taxpayers with opportunities to generate business
deductions for essentially personal expenditures.” Brennan v.
Commissioner, T.C. Memo. 1997-60; see also sec. 1.183-2(b)(9),
Income Tax Regs.; cf. sec. 1.183-2(b)(8), Income Tax Regs.,
regarding the reference to “personal or recreational elements”
quoted above.
In the present case, the personal dimensions of petitioners’
Amway activity indicate that such activity was not engaged in for
profit. The fact that petitioners have “no intentions of getting
out of * * * Amway” underscores this conclusion.6
The record suggests that petitioners enjoy the same
congenial sense of family and the same gratifying motivational
feeling from participating in their Amway activity as do many
other individuals who remain committed to Amway. The record also
suggests that Amway constitutes an important part of petitioners’
social life.
In addition, during the years in issue, petitioners attended
Amway conventions and seminars on a regular basis in cities such
6
Moreover, a taxpayer who intends to pursue an activity
“no matter what” cannot be said to pursue the activity in a
businesslike manner. Sec. 1.183-2(b)(1), Income Tax Regs.,
discussed supra.
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as New York, Denver, Atlanta, Orlando, and Minneapolis. For the
3 years in issue, petitioners incurred expenses for travel, meals
and entertainment (M&E), and seminars in the following amounts:
1994 1995 1996
Travel $ 4,858 $ 6,664 $ 5,287
M&E (gross) 2,004 4,250 2,932
Seminars 1,394 1,805 2,376
Total $ 8,256 $12,719 $10,595
For 1994 and 1995, the total of just these amounts exceeds
petitioners’ reported gross income from Amway for those years.
Moreover, petitioners received a personal benefit from their
Amway activity through the ability to purchase Amway products for
their own use at distributor’s cost without the customary 30-
percent markup. In 1994, 1995, and 1996, petitioners purchased,
for their personal use, Amway products valued at $2,133, $3,282,
and $3,786, respectively. See Ogden v. Commissioner, T.C. Memo.
1999-397, where the purchase of $1,800 to $2,400 worth of Amway
products per year for the taxpayers’ personal use was regarded by
the Court as a factor supporting the conclusion that the
taxpayers lacked a profit objective.
Petitioners estimate that they devoted between 51 and 80
hours per week to their Amway activity, with Mrs. Nissley
spending 21 to 40 hours per week and Mr. Nissley spending 30 to
40 hours per week. Petitioners contend that devoting so much
time to their Amway activity is indicative of a profit objective.
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See sec. 1.183-2(b)(3), Income Tax Regs. However, we regard
petitioners’ estimate as excessive. See Kropp v. Commissioner,
T.C. Memo. 2000-148 (“As a trier of fact, it is our duty to
listen to the testimony, observe the demeanor of the witnesses,
weigh the evidence, and determine what we believe.”); see also
Tokarski v. Commissioner, 87 T.C. 74, 77 (1986) (“we are not
required to accept the self-serving testimony of petitioner * * *
as gospel.”); cf. Diaz v. Commissioner, 58 T.C. 560, 564 (1972).
In any event, many individuals devote considerable time to their
hobbies and similar activities.
In view of the foregoing, we hold that petitioners are not
entitled to deduct the losses from their Amway activity for the
years in issue. However, pursuant to the provisions of section
183(b), petitioners are entitled to deduct expenses to the extent
of gross income from their Amway activity.
We have carefully considered all of the contentions made by
petitioners for a holding contrary to that expressed herein, and
to the extent not touched on above, we find such contentions to
be unpersuasive.
To give effect to the foregoing,
Decision will be entered
under to Rule 155.