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Our consideration of respondent's adjustment with respect to
petitioner's Schedule C deductions begins with an examination of
whether petitioner conducted her tutoring activity with the
intent to make a profit. Absent an intent to make a profit,
petitioner's tutoring activity could not be considered a trade or
business within the meaning of section 162. Commissioner v.
Groetzinger, 480 U.S. 23 (1987).
The test for determining whether a taxpayer conducted an
activity for profit is whether he or she entered into, or
continued, the activity with the actual or honest objective of
making a profit. Dreicer v. Commissioner, 78 T.C. 642, 644-645
(1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983);
sec. 1.183-2(a), Income Tax Regs. The taxpayer's expectation of
profit need not be reasonable, but the profit objective must be
bona fide, as judged by all facts and circumstances. Dreicer v.
Commissioner, supra at 645; Golanty v. Commissioner, 72 T.C. 411,
426 (1979), affd. without published opinion 647 F.2d 170 (9th
Cir. 1981); Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965),
affd. 379 F.2d 252 (2d Cir. 1967).
Whether petitioner engaged in her tutoring activity with the
requisite profit objective must be determined on a year-by-year
basis from the facts and circumstances of the case. Golanty v.
Commissioner, supra at 426; sec. 1.183-2(a) and (b), Income Tax
Regs. More weight is given to objective facts than to
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