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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.
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