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from the sale of goods" and is therefore a "trade or business"
within the meaning of section 513(c). The Supreme Court has
interpreted section 1.513-1(b), Income Tax Regs., as
“‘fragmenting’ the enterprise of publishing into its component
parts”, segregating "the 'trade or business' of selling
advertising space from the 'trade or business' of publishing a
journal". United States v. American College of Physicians, 475
U.S. 834, 839 (1986). The trade or business of soliciting,
selling, and publishing advertising does not lose identity as a
trade or business when the advertising appears in an exempt
organization's periodical that contains editorial matter related
to the exempt purposes of the organization. Id. (citing sec.
1.513-1(b), Income Tax Regs.).
Accordingly, we segregate the publishing of the editorial
matter in The Constabulary from the soliciting, selling, and
publishing of advertising space in The Constabulary. Petitioner
concedes that the advertising activity is not substantially
related to petitioner’s exempt purpose. Consequently, we hold
that petitioner was engaged in an unrelated trade or business of
soliciting, selling, and publishing advertising space.
We next examine whether petitioner's unrelated trade or
business was "regularly carried on" within the meaning of section
512. Petitioner argues that its advertising activity was not
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