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and intent of realizing a profit.”), affg. T.C. Memo. 1988-310.
“Profit” for purposes of section 183(a) means economic profit,
independent of tax savings. See Hayden v. Commissioner, supra at
1552. “An activity is engaged in for profit if the taxpayer
entertained an actual and honest, even though unreasonable or
unrealistic, profit objective in engaging in the activity.”
Campbell v. Commissioner, 868 F.2d 833, 836 (6th Cir. 1989),
affg. in part, revg. in part and remanding T.C. Memo. 1986-569;
see also Keanini v. Commissioner, 94 T.C. 41, 46 (1990); Dreicer
v. Commissioner, 78 T.C. 642, 644-645 (1982), affd. without
opinion 702 F.2d 1205 (D.C. Cir. 1983); sec. 1.183-2(a), Income
Tax Regs.
It is therefore the taxpayer’s intent to earn a profit that
determines the deductibility of an activity’s losses under
section 183, see Dreicer v. Commissioner, supra at 645; Bessenyey
v. Commissioner, 45 T.C. 261, 274 (1965), affd. 379 F.2d 252 (2d
Cir. 1967), and such intent is a question of fact, see Hayden v.
Commissioner, supra at 1552. 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.
See 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. The taxpayer bears the burden of proving the
requisite profit objective. See Rule 142(a); Hayden v.
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