Steven J. and Michele D. Scagliotta - Page 13

                                           - 13 -                                            

          level of carrying on a trade or business for purposes of section                   
          162.  The expenses incurred by petitioner in his real estate                       
          development and marketing activity are, at most, startup costs                     
          and/or organizational expenses.  See sec. 195.  Petitioner's                       
          activity never actually commenced.  McManus v. Commissioner,                       
          supra.  Further, petitioner failed to show the activity was                        
          conducted on a regular and continuous basis.  Id.  The majority                    
          of the actions taken by petitioner described above were in 1988.                   
          During 1990, the year at issue, the record indicates that                          
          petitioner merely listed the Clinton property for sale.5                           
          Petitioner contends that he spent approximately 10 to 20 hours                     
          per week on his real estate development and marketing activity.                    
          However, he did not present any oral testimony or documentary                      
          evidence to show how that time was actually spent on the                           
          activity.  Further, petitioner held a full-time job in the area                    
          of information systems during 1990.                                                
                On this record, the Court holds that petitioners failed to                   
          establish that, during 1990, petitioner's real estate development                  
          and marketing activity had actually commenced or was being                         
          conducted on a regular and continuous basis.  Id.  Petitioner                      
          failed to prove that he was carrying on a trade or business for                    
          purposes of section 162.  Accordingly, petitioners are not                         


          5                                                                                  
                The Court notes that, by 1990, petitioner had not even                       
          secured a building permit for the Bridgewater property.                            




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011