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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 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 loss with respect to the
activity; (7) the amount of occasional profits, if any, from the
activity; (8) the financial status of the taxpayer; and (9)
elements of personal pleasure or recreation. This list is
nonexclusive, the number of factors for or against the taxpayer
is not necessarily determinative, and more weight may be given to
some factors than to others. See sec. 1.183-2(b), Income Tax
Regs.; cf. Dunn v. Commissioner, 70 T.C. 715, 720 (1978), affd.
615 F.2d 578 (2d Cir. 1980).
Petitioners contend that the losses from the software
development activity are properly deductible because the activity
was profit motivated. Conversely, respondent asserts that the
activity was not engaged in for profit. We agree with
respondent.
A. Manner in Which the Activity Is Conducted
The fact that a taxpayer carries on the activity in a
businesslike manner and maintains complete and accurate books and
records may indicate a profit objective. See sec. 1.183-2(b)(1),
Income Tax Regs. A taxpayer ordinarily should use some
accounting techniques that, at a minimum, provide the taxpayer
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