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paragraph (1) or (2) of section 212.” Section 162 allows a
deduction for all ordinary and necessary expenses paid or
incurred in carrying on a business. Section 212 allows a
deduction for all the ordinary and necessary expenses paid or
incurred for the production or collection of income, or for the
management, conservation, or maintenance of property held for the
production of income.
Whether deductions are allowable under sections 162 or 212
depends on whether the taxpayer engaged in the activity with the
objective of making a profit. Ronnen v. Commissioner, 90 T.C.
74, 91 (1988); Dreicer v. Commissioner, 78 T.C. 642, 645 (1982),
affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983). The
taxpayer's expectation of profit need not be a reasonable one;
however, the taxpayer must have a bona fide objective to make a
profit. Hulter v. Commissioner, 91 T.C. 371, 393 (1988); Beck v.
Commissioner, 85 T.C. 557, 569 (1985); Allen v. Commissioner, 72
T.C. 28, 33 (1979); Dunn v. Commissioner, 70 T.C. 715, 720
(1978), affd. 615 F.2d 578 (2d Cir. 1980).
Whether a taxpayer has the requisite profit objective is a
question of fact to be resolved on the basis of all of the facts
and circumstances of the particular case at hand. Golanty v.
Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981); Dunn v. Commissioner, supra
at 720. The taxpayer here bears the burden of proof on this
issue. Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).
Greater weight is given to objective facts than a taxpayer's
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