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taxpayer's trade or business, the activity must be conducted
"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 order for an activity to be considered a trade or business
within the meaning of section 162, a taxpayer must conduct the
activity with the requisite profit motive, or intent. Absent an
intent to make a profit, the charter boat service could not be
considered a trade or business within the meaning of section 162.
See Commissioner v. Groetzinger, supra.
Implicit in the manner in which petitioners reported the
income and expenses of the charter boat service is their
contention that the activity constituted a trade or business
within the meaning of section 162. Petitioners maintain that
Hans Hammann was planning to terminate his regular employment in
order to concentrate his time on the charter boat service. They
claim that the Malaguena was acquired specifically to be used in
a charter boat business.
Respondent argues that the charter boat service does not
constitute a trade or business because Hans Hammann did not
engage in such activity with the requisite profit objective.
Consequently, according to respondent, petitioners cannot rely
upon section 162 to support the claimed deductions. Because of
respondent's characterization of the charter boat service,
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