7
judged by all the facts and circumstances. Taube v.
Commissioner, 88 T.C. 464, 478-479 (1987); Poast v. Commissioner,
T.C. Memo. 1994-399; sec. 1.183-2(a), Income Tax Regs.
The regulations set forth nine nonexclusive factors for
consideration in determining whether an activity is engaged in
for profit. Sec. 1.183-2(b), Income Tax Regs. These factors
are: (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 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 activities; (6) the taxpayer's history of
income or losses with respect to the activity; (7) the amount of
occasional profit, if any, which is earned; (8) the financial
status of the taxpayer; and (9) whether elements of personal
pleasure or recreation are involved. Furthermore, if a taxpayer
has substantial income from sources other than the activity in
question, it may be an indication that the activity is not
engaged in for profit, particularly if the losses from the
activity generate substantial tax benefits. Sec. 1.183-2(b),
Income Tax Regs.
No single factor is controlling. Abramson v. Commissioner,
86 T.C. 360, 371 (1986); Golanty v. Commissioner, 72 T.C. 411,
426 (1979), affd. without published opinion 647 F.2d 170 (9th
Cir. 1981). The taxpayer's stated intention to make a profit is
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011