6
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 expenses paid or incurred during the taxable year in
carrying on any trade or business". Where a taxpayer conducts an
activity not as a trade or business, section 183 allows
deductions generally to the extent that the activity generates
gross income. 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 is engaged in business and real estate
brokerage for profit depends on whether the activities were
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
continued it, with the bona fide objective of making a profit, as
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