Terry F. and Carol J. Zdun - Page 11

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          opinion 702 F.2d 1205 (D.C. Cir. 1983); Golanty v. Commissioner,            
          72 T.C. 411, 426 (1979), affd. without published opinion 647 F.2d           
          170 (9th Cir. 1981).  Although the taxpayer's expectation of a              
          profit need not be reasonable, he or she must have a good faith             
          objective of making a profit.  Dreicer v. Commissioner, supra at            
          645; Dunn v. Commissioner, 70 T.C. 715, 720 (1978), affd. on                
          another issue 615 F.2d 578 (2d Cir. 1980); sec. 1.183-2(a),                 
          Income Tax Regs.  Petitioners bear the burden of proving the                
          requisite intent.  Golanty v. Commissioner, supra at 426.                   
          Whether a taxpayer is engaged in an activity with the requisite             
          profit objective is determined from all the facts and                       
          circumstances.  Hulter v. Commissioner, 91 T.C. 371, 393 (1988);            
          Golanty v. Commissioner, supra at 426; sec. 1.183-2(a) and (b),             
          Income Tax Regs.  Petitioners assert that they engaged in the               
          apple orchard activity with the objective of making a profit;               
          however, more weight is given to objective facts than to the                
          taxpayers' mere statement of their intent.  Dreicer v.                      
          Commissioner, supra at 645; sec. 1.183-2(a), Income Tax Regs.               
               The regulations promulgated under section 183 list the                 
          following nine factors that should normally be taken into account           
          in determining whether an activity is engaged in for profit:  (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)            





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