opinion 702 F.2d 1205 (D.C. Cir. 1983). Their expectation of
profit need not have been reasonable; however, they must have
entered into the activity, or continued it, with the objective of
making a profit. Hulter v. Commissioner, 91 T.C. 371, 393
(1988); sec. 1.183-2(a), Income Tax Regs.
The burden is on petitioners to show error in respondent's
determination that the boat chartering and/or the residential
rental activities were not engaged in for profit. Rule 142(a);
Golanty v. Commissioner, 72 T.C. 411, 426 (1979), affd. without
published opinion 647 F.2d 170 (9th Cir. 1981); Boyer v.
Commissioner, 69 T.C. 521, 537 (1977); Benz v. Commissioner, 63
T.C. 375 (1974). Whether the requisite profit objective exists
is determined by looking at all the surrounding facts and
circumstances. Keanini v. Commissioner, 94 T.C. 41, 46 (1990);
sec. 1.183-2(b), Income Tax Regs. Greater weight is given to
objective facts than to a taxpayer's mere statement of his
intent. Thomas v. Commissioner, 84 T.C. 1244, 1269 (1985), affd.
792 F.2d 1256 (4th Cir. 1986); Beck v. Commissioner, 85 T.C. 557,
570 (1985); sec. 1.183-2(a), Income Tax Regs.
Section 1.183-2(b), Income Tax Regs., provides a list of
factors to be considered in the evaluation of a taxpayer's profit
objective: (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 in carrying on the activity;
(4) the expectation that assets used in the activity may
appreciate in value; (5) the success of the taxpayer in carrying
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011