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residence, which at that time was located in Santa Cruz,
California.
Petitioner claims that his ancient artifacts activities were
an active trade or business during 1990. We disagree.
Petitioner testified that his inventory was available for sale
during 1990. The mere fact that petitioner would have sold items
in his inventory if approached by a buyer, however, does not mean
that the activity rose to the level of an active trade or
business. Kennedy v. Commissioner, T.C. Memo. 1973-15 ("the
ability to transact business does not satisfy the 'carrying on'
requirement of [section 162]"); see also Richmond Television
Corp. v. United States, 345 F.2d 901, 907 (4th Cir. 1965),
vacated and remanded per curiam on other grounds 382 U.S. 68
(1965).
Petitioner also testified that he had a business plan for
his ancient artifacts activities. According to this business
plan, during 1990, petitioner testified that "I wasn't out
beating on doors, * * * I was doing what I had planned to do
which was to build up [the] inventory." Furthermore, petitioner
testified that starting a business like this requires a
tremendous amount of preparation work, including locating buying
sources and other general business considerations, and that he
spent longer than a year accumulating his inventory.
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