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activity shall be allowed except as provided in section 183(b).4
Section 183(c) defines an "activity not engaged in for profit" as
"any activity other than one with respect to which deductions are
allowable for the taxable year under section 162 or under
paragraph (1) or (2) of section 212."
For a deduction to be allowed under section 162 or 212(1) or
(2), the taxpayers must establish that they engaged in the
activity with an actual and honest objective of making an
economic profit independent of tax savings. Antonides v.
Commissioner, 91 T.C. 686, 693-694 (1988), affd. 893 F.2d 656
(4th Cir. 1990); Dreicer v. Commissioner, 78 T.C. 642, 644-645
(1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983).
Their expectation of profit need not have been reasonable;
however, they must have entered into the activity, or continued
with it, with the objective of making a profit. Hulter v.
Commissioner, 91 T.C. 371, 393 (1988); sec. 1.183-2(a), Income
Tax Regs.
Whether the requisite profit objective exists is determined
by looking at all the surrounding facts and circumstances.
Keanini v. Commissioner, 94 T.C. 41, 46 (1990); sec. 1.183-2(b),
Income Tax Regs. Greater weight is given to objective facts than
to a taxpayer's mere statement of intent. Thomas v.
Commissioner, 84 T.C. 1244, 1269 (1985), affd. 792 F.2d 1256 (4th
4 Sec. 183(b) allows deductions in situations not
applicable to the instant cases.
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