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building during 1991 and for several years thereafter. We find
that petitioner never made any serious attempt to rent the
apartments.
Respondent contends that petitioner had not yet begun his
trade or business in 1991. Respondent argues that petitioner's
expenses, other than those conceded by respondent, are start-up
expenses paid in connection with a trade or business, and may be
deductible under section 195 if and when he begins to operate his
apartment building as a business.
Petitioner's rental expenses are deductible under sections
162 or 212 only if his use of the property constituted an
activity engaged in for profit. Sec. 183(a). The test to
determine whether an activity is engaged in for profit is whether
the individual engaged in the activity with the "actual and
honest objective of making a profit." Dreicer v. Commissioner,
78 T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205
(D.C. Cir. 1983). The taxpayer's expectation of earning a profit
need not be reasonable, but the taxpayer must establish that the
activities were continued with a bona fide profit objective.
Dreicer v. Commissioner, supra; Hager v. Commissioner, 76 T.C.
759, 784 (1981); sec. 1.183-2(a), Income Tax Regs. Whether the
taxpayer had such an objective must be determined by reference to
all the surrounding facts and circumstances, and greater weight
is given to such facts than to the taxpayer's statement of
intent. Dreicer v. Commissioner, supra. The regulations set
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