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in a trade or business within the meaning of section 162,11 "the
taxpayer must be involved in the activity with continuity and
regularity and * * * the taxpayer's primary purpose for engaging
in the activity must be for income or profit." Commissioner v.
Groetzinger, 480 U.S. 23, 35 (1987). Although a reasonable
expectation of a profit is not required, the taxpayer must have
entered the activity, or continued it, with the bona fide
objective of making a profit, as indicated by the surrounding
facts and circumstances. Taube v. Commissioner, 88 T.C. 464,
478-479 (1987); sec. 1.183-2(a), Income Tax Regs. The
regulations accompanying section 183 contain a nonexhaustive list
of nine factors to consider when determining whether an activity
is engaged in for a profit. Sec. 1.183-2(b), Income Tax Regs.
University professors, in their capacity as educators,
regularly conduct research and produce scholarly materials
pertaining to their particular area of competence. In addition,
the receipt of the fellowship, as well as the publication of
Binding Passions, enhanced petitioner's reputation as a scholar,
and was certainly considered for purposes of determining his
salary in succeeding years. Moreover, despite the royalty
agreement in the record, petitioners have offered little evidence
concerning the amount of income earned by petitioner for the
11 Sec. 162(a) provides that there shall be allowed as a
deduction all the ordinary and necessary expenses paid or
incurred during the taxable year in carrying on any trade or
business.
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