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status such continued losses, if not explainable, * * * may be
indicative that the activity is not being engaged in for profit."
Sec. 1.183-2(b)(6), Income Tax Regs. During the years in issue,
petitioners deducted $30,888.36 of losses attributable to
petitioner's writing activity. The magnitude of the activity's
losses in comparison with its revenues is an indication that
petitioner did not have a profit motive with respect to the
activity. Smith v. Commissioner, supra; Burger v. Commissioner,
supra.
Petitioners contend that the losses are startup losses. We
recognize that losses in the early years of a business are not
necessarily inconsistent with a profit motive. However, the
taxpayer must demonstrate that enough profits will be earned in
the future to cover the losses in the startup years. Golanty v.
Commissioner, 72 T.C. at 426-427. Petitioners deducted losses
totaling $63,953 over the first 6-year period of the activity.
As of the date of trial, with few exceptions, petitioner had not
earned enough from an article to cover the cost of the related
trip. We are not convinced that petitioner will ultimately be
able to recover losses from prior years.
Because petitioner's writing activity was not an activity
engaged in for profit, the activity cannot be considered a trade
or business for purposes of section 162(a). Therefore, she is
only entitled to deduct the expenses incurred in that activity in
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