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an individual or an S corporation no deduction attributable
to an activity which is not engaged for profit is allowed
except as provided in section 183(b). Section 183(b)(1)
allows the deductions which would be allowable without
regard to whether the activity is engaged in for profit.
Section 183(b)(2) allows a deduction equal to the amount of
the deductions that would be allowable for the taxable year
if the activity were engaged in for profit, but only to the
extent the gross income derived from the activity exceeds
the deductions allowable under section 183(b)(1).
Section 183(c) defines "activity not engaged in for
profit" as "any activity other than one with respect to
which deductions are allowable for the taxable year under
section 162 or under paragraph (1) or (2) of section 212."
The test for determining whether an activity is engaged in
for profit is whether the individual is engaged in the
activity with "the actual and honest objective of making a
profit". See Dreicer v. Commissioner, 78 T.C. 642, 645
(1982), affd. without published opinion 702 F.2d 1205 (D.C.
Cir. 1983); Brannen v. Commissioner, 78 T.C. 471, 502
(1982), affd. 722 F.2d 695 (11th Cir. 1984); Allen v.
Commissioner, 72 T.C. 28, 33 (1979). Although a taxpayer
need not have a reasonable expectation of earning a profit,
he must have entered into or continued the activity with a
bona fide objective of doing so. See Keanini v. Commis-
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