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OPINION
Was the Activity Engaged in for Profit?
The first issue to be decided is whether petitioner's
treasure hunting activity was an activity engaged in for profit
within the meaning of section 183. This is a factual inquiry
requiring a weighing of the evidence in the record.
Respondent asserts that petitioner's treasure hunting
activity was not engaged in with the objective of making a profit
and that section 183(a) applies. Thus, respondent argues that no
deductions attributable to this activity are allowed, except as
provided in section 183(b). Petitioners contend that petitioner
entered into and carried on the treasure hunting activity with
the requisite profit objective and that, as a result, the
deductions are allowed under section 162 or section 212.
Section 183(a) provides generally that, if an activity is
not engaged in for profit, no deduction attributable to such
activity shall be allowed except as provided in section 183.
Section 183(b) allows deductions in situations not applicable to
the instant case.
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
6(...continued)
this activity should have been reported on Schedule C.
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