- 10 -
claimed a deduction of only $74,350 with respect to the
Cloudia. The record does not explain the nature of the
additional amount disallowed by respondent, viz $413, and
petitioner has raised no issue regarding this additional
amount.
The dispute between the parties over the deduction of
petitioner's alleged losses incurred in connection with
the Cloudia turns on whether the losses were incurred in
an activity not entered into for profit. Section 183(a)
provides:
(a) General Rule.--In the case of an
activity engaged in by an individual or an S
corporation, if such activity is not engaged
in for profit, no deduction attributable to
such activity shall be allowed under this
chapter except as provided in this section.
For this purpose, section 183(c) defines the phrase
"activity not engaged in for profit" to mean "any activity
other than one with respect to which deductions are allow-
able for the taxable year under section 162 or under
paragraph (1) or (2) of section 212." If we find on the
basis of all of the facts and circumstances of the case
that petitioner's activity with respect to the Cloudia
was "not engaged in for profit" within the meaning of
section 183(c), then no deductions with respect to that
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