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activity are allowable under section 212. Sec. 183(c);
sec. 1.183-2(a), Income Tax Regs.
An activity is engaged in for profit if the taxpayer
has an "actual and honest objective of making a profit".
Keanini v. Commissioner, 94 T.C. 41, 46 (1990); Dreicer v.
Commissioner, 78 T.C. 642, 644-645 (1982), affd. without
opinion 702 F.2d 1205 (D.C. Cir. 1983). Although the
expectation of profit need not be reasonable, it must
be shown that a bona fide profit objective did exist.
Golanty v. Commissioner, 72 T.C. 411, 425-426 (1979),
affd. without published opinion 647 F.2d 170 (9th Cir.
1981); sec. 1.183-2(a), Income Tax Regs. In this context,
profit means economic profit, independent of tax savings.
Hulter v. Commissioner, 91 T.C. 371, 393 (1988). Whether
petitioner engaged in the Cloudia activity with the
requisite profit objective is a question of fact to be
determined from all the facts and circumstances. Keanini
v. Commissioner, supra at 46; Golanty v. Commissioner,
supra at 426; secs. 1.183-2(a), 1.212-1(c), Income Tax
Regs. Petitioner bears the burden of proving that
respondent's determination is wrong. Rule 142(a), Tax
Court Rules of Practice and Procedure (hereinafter all
Rule references are to the Tax Court Rules of Practice
and Procedure).
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