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deductions are allowable for the taxable year under section 162
[trade or business] or under paragraph (1) or (2) of section 212
[expenses for the production of income]." For a deduction to be
allowed under section 162 or section 212(1) or (2), taxpayers
must establish that they engaged in the activity with an actual
and honest objective of making an economic profit independent of
tax savings. Antonides v. Commissioner, 91 T.C. 686, 693-694
(1988), affd. 893 F.2d 656 (4th Cir. 1990); Dreicer v.
Commissioner, 78 T.C. 642, 644-645 (1982), affd. without opinion
702 F.2d 1205 (D.C. Cir. 1983). Their expectation of profit need
not have been reasonable; however, they must have entered into
the activity, or continued it, with the objective of making a
profit. Hulter v. Commissioner, 91 T.C. 371, 393 (1988); sec.
1.183-2(a), Income Tax Regs.
The burden is on petitioners to show error in respondent's
determination that the Christmas tree farming activity was not
engaged in for profit. Rule 142(a). Whether the requisite
profit objective exists is determined by looking to all the
surrounding facts and circumstances. Keanini v. Commissioner, 94
T.C. 41, 46 (1990); sec. 1.183-2(b), Income Tax Regs. Greater
weight is given to objective facts than to a taxpayer's mere
statement of intent. Thomas v. Commissioner, 84 T.C. 1244, 1269
(1985), 792 F.2d 1256 (4th Cir. 1986); sec. 1.183-2(a), Income
Tax Regs.
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