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that petitioners were engaged in the following activities during
1991, which petitioner contends constituted a trade or business
activity for purposes of section 162(a): (1) The ownership and
holding for sale or lease of a condominium in Manatee County,
Florida (Florida condominium activity); (2) "lawyering" (legal
activity); and (3) research, inventing and teaching in the field
of solar energy (solar energy activity).7 Respondent contends
that none of these activities rose to the level of a trade or
business within the meaning of section 162, and, therefore, none
of the expenses attributable thereto are deductible on Schedule
C.
Section 162 allows a deduction for "Trade or Business
Expenses", which are "all the ordinary and necessary expenses
paid or incurred during the taxable year in carrying on any trade
or business". Sec. 162(a).8 The inquiry as to whether a
taxpayer is carrying on a trade or business is dependent on the
facts and circumstances of each case. Commissioner v.
Groetzinger, 480 U.S. 23, 36 (1987).
7
Petitioner asserted that he and Mrs. Thomason were engaged
in "a number of activities" to make a profit during 1991.
However, the Court is satisfied that the relevant deductions on
Schedule C of their return pertain to only the three activities
described.
8
Cash basis taxpayers must establish: (1) That the expenses
were paid; (2) that they were paid during the year in issue;
(3) that they were paid in furtherance of a trade or business;
and (4) that they were ordinary and necessary expenses of the
trade or business. Sec. 1.162-1, Income Tax Regs.
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