Joseph E. Machado - Page 13

                                       - 13 -                                         
          for-profit activity.  Allen v. Commissioner, 72 T.C. 28, 33                 
          (1979).                                                                     
               For purposes of section 183, an activity is not considered             
          engaged in for profit unless it constitutes an activity entered             
          into or continued by the taxpayer with an actual and honest or a            
          good faith objective of making a profit.  See Mercer v.                     
          Commissioner, 376 F.2d 708, 710-711 (9th Cir. 1967), revg. T.C.             
          Memo. 1966-82; Antonides v. Commissioner, 91 T.C. 686, 693-694              
          (1988), affd. 893 F.2d 656 (4th Cir. 1990); Dreicer v.                      
          Commissioner, 78 T.C. 642, 645 (1982), affd. without published              
          opinion 702 F.2d 1205 (D.C. Cir. 1983); Barter v. Commissioner,             
          T.C. Memo. 1991-124, affd. without published opinion 980 F.2d 736           
          (9th Cir. 1992); Larson v. Commissioner, T.C. Memo. 1986-542,               
          affd. without published opinion 833 F.2d 1016 (9th Cir. 1987);              
          Ruben v. Commissioner, T.C. Memo. 1986-260, affd. without                   
          published opinion 852 F.2d 1290 (9th Cir. 1988).                            
               The regulations under section 183 provide a nonexclusive               
          list of factors to consider in determining whether an activity              
          was engaged in for profit.  Such factors include:  (1) The manner           
          in which the taxpayer carried on the activity; (2) the expertise            
          of the taxpayer or his advisors; (3) the time and effort expended           
          by the taxpayer 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 on other similar or                     
          dissimilar activities; (6) the taxpayer's history of income or              




Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011