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contributing to petitioner's decision to abandon his alleged
business activities involving the sale of artwork.
On the instant record, we sustain respondent's determination
that the gain that petitioner realized from the sale of the
drawing in question is long-term capital gain.
Petitioner's Horse Activity and Cattle Activity
Section 183--In General
Section 183(a) generally limits the amount of expenses that
a taxpayer may deduct with respect to an activity "not engaged in
for profit" to the deductions provided in section 183(b).
Section 183(b)(1) provides that deductions that would be allow-
able without regard to whether such activity is engaged in for
profit are to be allowed. Section 183(b)(2) further provides
that deductions which would be allowable only if such activity is
engaged in for profit are to be allowed, but only to the extent
that the gross income derived from such activity for the taxable
year exceeds the deductions allowable under section 183(b)(1).
An activity is "not engaged in for profit" if it is an activity
other than one with respect to which deductions are allowable for
the taxable year under section 162 or section 212(1) or (2).
Sec. 183(c).
In determining whether an activity is engaged in for profit,
the taxpayer must show that he or she engaged in the activity
with an actual and honest objective of making a profit. E.g.,
Hulter v. Commissioner, 91 T.C. 371, 392 (1988); Dreicer v.
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