876 F2d 897 Portland Golf Club v. Commissioner Internal Revenue Service

876 F.2d 897

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

PORTLAND GOLF CLUB, Petitioner-Appellee,

No. 88-7218.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 6, 1989.
Decided June 1, 1989.

Before CANBY, DAVID R. THOMPSON, and LEAVY, Circuit Judges.


In North Ridge Country Club v. C.I.R., we recently held that a social club's losses from a non-member activity are not deductible under I.R.C. Sec. 512(a) unless that activity was entered into with the intent of producing gains in excess of direct costs (costs related to the non-member activity) and indirect costs (overhead and other fixed expenses). In so doing, we reversed the tax court's decision, since we concluded the court applied the wrong legal standards for profit under section 512(a).

The tax court decided this case by applying the same standards we rejected in North Ridge. Because Portland Golf Club could have reported gains in excess of direct and indirect costs, but did not do so, relying on a method of allocation stipulated to be reasonable by the Commissioner, we REMAND this case to the tax court for a determination of whether Portland Golf Club engaged in its non-member activities with the intent required under North Ridge to deduct its losses from those activities.


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This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3