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a paralegal as an independent contractor out of his home. In
accordance with his belief, petitioner set up his home office
with the necessary research materials and equipment. During 1991
and 1992, while petitioner did not derive income from his
paralegal skills, he was hopeful that he was on the road to
recovery based upon the representations of his medical providers.
Clearly the activities of a boat repair person and a
paralegal are separate and distinct. It is not logical that
these two activities be combined as one trade or business on one
Schedule C. Accordingly, we hold that the income and expenses
for each activity should be treated separately. We further hold
that petitioner, in 1992, realistically had no likelihood of
reentering the boat repair field. His maintenance of the tools,
some of which were monogrammed, was more for sentimental reasons
than for business potential. Consequently, in 1992, he was no
longer in hiatus from that activity and thus no longer “carrying
on” that trade or business. Accordingly, petitioner is not
entitled to deduct the storage expense incurred for his boat
supplies and tools.
On the other hand, petitioner was in hiatus from earning his
living as a paralegal. Indeed, the actions he took in 1991 and
1992 to bolster his opportunities and abilities to earn a living
from that profession support this conclusion. Respondent’s
contentions that petitioner was merely in a startup phase of his
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