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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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