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of section 162. Sec. 1402(c). Thus, to be engaged in a trade or
business within the meaning of section 1402(a), an individual
must be involved in an activity with continuity and regularity
and his primary purpose for engaging in the activity must be for
income and profit. See Commissioner v. Groetzinger, 480 U.S. 23,
35 (1987).
Respondent asserts that petitioner misappropriated his
father's marijuana cash hoard, and that such a conversion is
income from a trade or business, because misappropriating the
money occupied petitioner's "time, attention, and labor" and was
for petitioner's own profit and livelihood. Petitioner, on the
other hand, maintains that he earned no self-employment income in
1989 and 1990. His dog kennel business was unsuccessful, and
reported a net loss for 1990.
Petitioner's testimony and that of his wife, and Ms. Warren
satisfies us that petitioner did not carry on any trade or
business activity in 1989 and 1990 other than his dog kennel
business in 1990. Respondent's agent acknowledged that the dog
kennel business could not have been the source for all of the
additional funds asserted in the notice of deficiency.
As previously mentioned, respondent posits that money
appropriated from petitioner's father is self-employment income
to petitioner. However, we do not find that petitioner took part
in his father's marijuana activity. We therefore hold that
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