John J. Kaiser and Sofia P. Kaiser - Page 10

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               To prove that an activity is engaged in for profit, the                
          taxpayer must show that the activity was engaged in with an                 
          actual and honest objective of making a profit.  E.g., Hulter v.            
          Commissioner, 91 T.C. 371, 392 (1988); Dreicer v. Commissioner,             
          78 T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205                
          (D.C. Cir. 1983).  Although the taxpayer's expectation of a                 
          profit need not be reasonable, a good faith objective of making a           
          profit is required.  E.g., Dreicer v. Commissioner, supra; Dunn             
          v. Commissioner, 70 T.C. 715, 720 (1978), affd. on another issue            
          615 F.2d 578 (2d Cir. 1980); sec. 1.183-2(a), Income Tax Regs.              
               Petitioners offered no evidence that they pursued the                  
          "Computer Books + Tapes" activity with the requisite profit                 
          objective, and, accordingly, we sustain respondent's disallowance           
          of the losses claimed from such activity.                                   
               To reflect the foregoing,                                              
                                                  Decisions will be entered           
                                             under Rule 155.                          

















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