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constitute a trade or business, section 212 allows as a deduction
all the ordinary and necessary expenses paid or incurred during
the taxable year for the production or collection of income, or
the management, conservation, or maintenance of property held for
the production of income. Sec. 212(1) and (2).
Whether a taxpayer engaged in an activity with the objective
of making a profit is a question of fact. Dreicer v.
Commissioner, 78 T.C. 642, 644-645 (1982), affd. without opinion
702 F.2d 1205 (D.C. Cir. 1983); sec. 1.183-2(a), Income Tax Regs.
While a reasonable expectation of profit is not required, the
taxpayer's profit objective must be bona fide. Taube v.
Commissioner, 88 T.C. 464, 478-479 (1987). In making this
determination, the Court gives more weight to objective facts
than to a taxpayer's mere statement of intent. Dreicer v.
Commissioner, supra at 645; sec. 1.183-2(a), Income Tax Regs.
Section 1.183-2(b), Income Tax Regs., provides a
nonexclusive list of factors to be considered in deciding whether
an activity is engaged in for profit. These factors include:
(1) The manner in which the taxpayer carried on the activity; (2)
the expertise of the taxpayer or his advisers; (3) the time and
effort expended by the taxpayer in carrying on the activity; (4)
the expectation that the assets used in the activity may
appreciate in value; (5) the success of the taxpayer in carrying
on other similar or dissimilar activities; (6) the taxpayer's
history of income or losses with respect to the activity; (7) the
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