5
6001; Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965).
Moreover, deductions are strictly a matter of legislative grace,
and a taxpayer has the burden of establishing that he or she is
entitled to any deduction claimed on a return. Deputy v. du
Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934).
Section 162(a) allows as a deduction "all the ordinary and
necessary business expenses paid or incurred during the taxable
year in carrying on any trade or business". Where an individual
conducts an activity that is not engaged in for profit, section
183 limits the allowable deductions. To be engaged in a trade or
business within the meaning of section 162, "the taxpayer must be
involved in the activity with continuity and regularity and * * *
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).
Whether petitioner engaged in the water purifier or real
estate business for profit depends on whether the activity was
undertaken with an "actual and honest objective" of making a
profit. Elliott v. Commissioner, 90 T.C. 960, 970 (1988), affd.
without published opinion 899 F.2d 18 (9th Cir. 1990); Fuchs v.
Commissioner, 83 T.C. 79, 98 (1984); Dreicer v. Commissioner, 78
T.C. 642, 644-645 (1982), affd. without opinion 702 F.2d 1205
(D.C. Cir. 1983). While a reasonable expectation of a profit is
not required, petitioner must have entered into the activity, or
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