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publication of his work. There is no history of profit potential
nor any projections of profit potential from his activity.
Accordingly, we conclude that petitioner did not engage in his
research and writing activities with the primary purpose of
producing income apart from the salary he earned as a professor
or apart from the fellowship he received. Therefore,
petitioner's activities do not constitute a separate trade or
business, and the related expenses are not deductible on Schedule
C.
We also disagree with respondent's determination that
petitioner incurred the expenses in question in his capacity as
an employee of UConn. Rather, we conclude that petitioner
incurred the expenses in relation to the fellowship income. It
is clear from this record that the expenses claimed relate to the
research and writing which petitioner engaged in pursuant to the
fellowship. Since we have held that the fellowship income
constitutes noncompensatory income, petitioner's fellowship
expenses are deductible pursuant to section 212.
2. Rental of Petitioners' Connecticut House
We now address respondent's determination with respect to
the items of income and expense attributable to the rental use of
petitioners' house.
Respondent, employing the limitations set forth in section
183, determined that petitioners did not engage in the activity
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