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incurred during the taxable year in carrying on any trade or
business". In order for an expenditure to be deductible as a
business expense, the expenditure must relate to an activity that
amounts to the present carrying on of an existing business.
Koons v. Commissioner, 35 T.C. 1092, 1100 (1961). Thus, in order
for petitioner to meet his burden of proof, it is necessary to
establish that the expenditures in question related to activities
that amounted to the present carrying on of a business.
Reisinger v. Commissioner, 71 T.C. 568, 572 (1979); Koons v.
Commissioner, supra. Whether a taxpayer is engaged in a trade or
business, and the nature of such trade or business, are questions
of fact. Ford v. Commissioner, 56 T.C. 1300, 1307 (1971), affd.
per curiam 487 F.2d 1025 (9th Cir. 1973); Corbett v.
Commissioner, 55 T.C. 884, 887 (1971); Canter v. United States,
173 Ct. Cl. 723, 354 F.2d 352 (1965). The Supreme Court has
interpreted the trade or business terminology of section 162 to
mean that the taxpayer must be involved in the activity with
continuity and regularity and that the taxpayer's primary purpose
for engaging in the activity must be for income or profit.
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987). In
Commissioner v. Groetzinger, supra at 35, the Supreme Court
stated "that to be engaged in a trade or business, the taxpayer
must be involved in the activity with continuity and regularity
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