B. Albert and Betty M. Holowinski - Page 7

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          individual is engaged in an activity for the production or                  
          collection of income or for the management, conservation, or                
          maintenance of property held for the production of income under             
          section 212, is whether the individual is engaged in the activity           
          with the predominant purpose and intention of making a profit.              
          Nickeson v. Commissioner, 962 F.2d 973, 976 (10th Cir. 1992),               
          affg. Brock v. Commissioner, T.C. Memo. 1989-641; Allen v.                  
          Commissioner, 72 T.C. 28, 33 (1979).  While the taxpayer's                  
          expectation need not be reasonable, it must be a good-faith                 
          expectation.  Allen v. Commissioner, supra at 33.  In resolving             
          the factual question of the taxpayer's intent, greater weight is            
          given to the objective facts than to the taxpayer's statements of           
          intention.  Thomas v. Commissioner, 84 T.C. 1244, 1269 (1985),              
          affd. 792 F.2d 1256 (4th Cir. 1986).                                        
               Section 1.183-2(b), Income Tax Regs., sets forth a                     
          nonexclusive list of nine factors to be used to determine whether           
          an activity is engaged in for profit.  The factors are:  (1) The            
          manner in which the taxpayer carries on the activity; (2) the               
          expertise of the taxpayer or his advisers; (3) the time and                 
          effort expended by the taxpayer in carrying on the activity; (4)            
          the expectation that the assets used in the activity may                    
          appreciate in value; (5) the success of the taxpayer in carrying            
          on other similar or dissimilar activities; (6) the taxpayer's               
          history of income or losses with respect to the activity; (7) the           
          amount of occasional profits, if any, which are earned; (8) the             

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