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Section 162(a) allows taxpayers to deduct the ordinary and
necessary expenses of carrying on a trade or business. Where a
taxpayer conducts an activity not as a trade or business, section
183 allows deductions generally to the extent 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).
In determining whether an activity is engaged in for profit,
the taxpayer must show an actual and honest objective of making a
profit. Surloff v. Commissioner, 81 T.C. 210, 233 (1983);
Dreicer v. Commissioner, 78 T.C. 642, 644-645 (1982), affd.
without opinion 702 F.2d 1205 (D.C. Cir. 1983). The
determination whether petitioner had an actual and honest
objective of making a profit requires an examination of all the
surrounding facts and circumstances of the case. Golanty v.
Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981); sec. 1.183-2(b), Income Tax
Regs. We give greater weight to the objective facts than to
petitioner's mere statement of intent. Dreicer v. Commissioner,
supra at 645; sec. 1.183-2(a), Income Tax Regs.
Section 1.183-2(b), Income Tax Regs., sets forth some of the
relevant factors for determining when an activity is engaged in
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