John K. Jorman, Jr. and Audrey Jorman - Page 9

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          between taxpayers and the Commissioner involving whether certain            
          activities constituted trades or businesses for purposes of                 
          section 162(a).  In resolving such disputes we are required to              
          focus upon the nature of the activity involved.  Needless to say,           
          before we can determine whether an activity constitutes a trade             
          or business, we must know what the activity is.  In this case, we           
          have no idea what petitioner's real-estate-related activity was             
          in 1991.  Without knowing the nature and the extent of the                  
          underlying activity, we cannot determine whether such activity              
          was conducted by petitioner regularly and with continuity with              
          the primary purpose of earning a profit.  Absent such findings              
          we are unable to conclude that petitioner was engaged in a real-            
          estate-related trade or business during 1991.  See Commissioner             
          v. Groetzinger, 480 U.S. 23, 35 (1987).  Because petitioner has             
          failed to meet his burden of proving that the deductions in                 
          dispute relate to expenses paid or incurred in connection with an           
          activity that constitutes a trade or business, respondent's                 
          adjustments disallowing the deductions are sustained.                       
          Accuracy-Related Penalty                                                    
               Respondent determined that petitioners were liable for the             
          accuracy-related penalty pursuant to section 6662(a) in the                 
          amount of $1,268 for the year 1991.  Section 6662(a) and (b)(1)             
          imposes a penalty on any portion of an underpayment which is                
          attributable to negligence or disregard of rules or regulations.            
          The term "negligence" includes any failure to make a reasonable             

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