Walter J. Piszczek - Page 1

                                 T.C. Memo. 1998-307                                  

                               UNITED STATES TAX COURT                                

                          WALTER J. PISZCZEK, Petitioner v.                           
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 14735-94.                  Filed August 24, 1998.           

               Ronald O. W. Ylitalo, for petitioner.                                  
               William F. Hammack, for respondent.                                    

                    P, an airline pilot, spent several years and                      
               substantial sums attempting to develop a wind-powered                  
               distillery for the production of ethanol.  For 1988                    
               through 1990, P claimed research and experimentation                   
               deductions under sec. 174, I.R.C., in the amounts of                   
               $44,905, $14,894, and $13,780 respectively.  R                         
               disallowed these deductions based on a determination                   
               that P did not expend these amounts in connection with                 
               a trade or business, since P lacked a profit objective.                
               Held:  P's wind-powered distillery activity was not                    
               profit motivated.                                                      

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