- 12 -
(1987). Similarly, deductibility under section 212 depends upon
whether the expenditures were made "primarily in furtherance of a
bona fide profit objective." Agro Science Co. v. Commissioner,
934 F.2d 573, 576 (5th Cir. 1991), affg. T.C. Memo. 1989-687.
It is therefore the taxpayer's intent to earn a profit that
determines the deductibility of an activity's losses under
section 183. Dreicer v. Commissioner, 78 T.C. 642, 645 (1982),
affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983); Bessenyey
v. Commissioner, 45 T.C. 261, 273-274 (1965), affd. 379 F.2d 252
(2d Cir. 1967). Such intent is to be determined by examining all
the facts and circumstances, giving greater weight to objective
facts than to the taxpayer's statement of intent. Siegel v.
Commissioner, 78 T.C. 659, 699 (1982); Engdahl v. Commissioner,
72 T.C. 659, 666 (1979); sec. 1.183-2(a) and (b), Income Tax
Regs. Although a reasonable expectation of profit is not
required, the facts and circumstances must indicate that the
taxpayer entered into the activity, or continued the activity,
with the actual and honest objective of making a profit. Keanini
v. Commissioner, 94 T.C. 41, 46 (1990); Dreicer v. Commissioner,
supra at 644-645; sec. 1.183-2(a), Income Tax Regs. The taxpayer
bears the burden of proving the requisite profit objective. Rule
142(a); Dreicer v. Commissioner, supra at 646; Golanty v.
Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981). Moreover, the Court of
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