- 10 -
In Deely v. Commissioner, supra at 1093, we concluded that, based
on Whipple v. Commissioner, supra at 202-203, a taxpayer claiming
to be in the business of promoting, financing, and/or dealing in
corporations must show that the activity is conducted for a fee
or commission or with the immediate purpose of selling the
corporations at a profit in the ordinary course of that business.
A taxpayer who seeks a return from long-range investment gains
rather than from a quick sale of a corporation after it has
become established is more likely to be considered an investor
rather than a business promoter. Deely v. Commissioner, supra at
1093-1095. Whether petitioner is engaged in the trade or
business of promoting corporations is a question of fact. Smith
v. Commissioner, 62 T.C. 263, 268 (1974); see also Commissioner
v. Groetzinger, 480 U.S. 23, 36 (1987).
Petitioner claims that he was engaged in the trade or
business of a venture capitalist or business promoter and that
the loans and advances that he made to Color Trick were made in
the course of that trade or business. Petitioner, however, has
not established that he was engaged in the trade or business of
promoting corporations in addition to his medical practice. We
note that petitioner's medical practice was his primary
occupation, to which he devoted approximately 40 to 50 hours per
week, excluding vacations. Additionally, petitioner admitted
that he was not in the business of lending money when he began
advancing funds to Color Trick. Moreover, nothing in
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