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Section 183(c) defines an activity not engaged in for profit
as "any activity other than one with respect to which deductions
are allowable for the taxable year under section 162 or under
paragraph (1) or (2) of section 212." Deductions are allowable
under section 162 or under section 212(1) or (2) only if the
taxpayer is engaged in the activity with the "actual and honest
objective of making a profit." See Ronnen v. Commissioner, 90
T.C. 74, 91 (1988); Dreicer v. Commissioner, 78 T.C. 642, 645
(1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983).
The existence of the requisite profit objective is a
question of fact that must be decided on the basis of the entire
record. See Benz v. Commissioner, 63 T.C. 375, 382 (1974).
The regulations set forth a nonexhaustive list of factors
that may be considered in deciding whether a profit objective
exists. These factors are: (1) The manner in which the taxpayer
carries on the activity; (2) the expertise of the taxpayer or his
advisers; (3) the time and effort expended by the taxpayer in
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represented interest from bank accounts that may have been
maintained in the name of The T.O.E. Co. Accordingly, petitioner
did not derive any gross income from his meteorite and pyrite
collection activity because there was no "organizational and
economic interrelationship" between that activity and the
production of interest from bank accounts. See sec. 1.183-
1(d)(1), Income Tax Regs. In other words, petitioner's meteorite
and pyrite collection activity and the production of interest
from bank accounts were not facets of the same "activity".
Therefore, if petitioner's activity were not engaged in for
profit, sec. 183(b) would not serve to allow any deductions.
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