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We conclude that the amounts paid under the arrangement
between petitioner and Romer are properly treated as paid under
an accountable plan. Accordingly, we hold that petitioner is
entitled to exclude from his gross income the $10,752 in per diem
payments which he received from Romer during 1993.
The second issue for decision is whether petitioner's horse
selling and leasing activity was an activity not engaged in for
profit within the meaning of section 183.
On a Schedule C attached to his 1993 return, petitioner
reported gross income from his horse selling and leasing activity
in the amount of $600, claimed expenses in the total amount of
$6,136, and claimed a net loss in the amount of $5,536. In the
statutory notice of deficiency, respondent disallowed the net
loss on the ground that the activity was not engaged in for
profit.
Section 183(a) disallows any deduction attributable to an
activity not engaged in for profit except as provided in section
183(b). For purposes of section 183, the term "activity not
engaged in for profit" means 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.
Sec. 183(c).
Section 162(a) provides for the deduction of all ordinary
and necessary expenses paid or incurred during the taxable year
in carrying on any trade or business. Where an activity does not
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