- 8 -
which the deductions relate were not undertaken for profit.
Because we sustain respondent's alternative determination,
namely, that petitioner's activities were not undertaken for
profit, we do not express an opinion regarding respondent's
primary determination.
Respondent's determinations are presumed to be correct, and
petitioner bears the burden of proving otherwise. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Furthermore,
deductions are strictly a matter of legislative grace, and
petitioner must demonstrate his entitlement to any deductions
claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435,
440 (1934).
Whether a taxpayer engaged in an activity with the primary
purpose of making a profit is a question of fact. Dreicer v.
Commissioner, 78 T.C. 642, 644-645 (1982), affd. without pub-
lished 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, a 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.
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