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position. See Dunn v. Commissioner, 70 T.C. 715, 720 (1978),
affd. 615 F.2d 578 (2d Cir. 1980); sec. 1.183-2(b), Income Tax
Regs. Certain elements are given more weight than others because
they are more meaningfully applied to the facts in our case.
Upon reviewing the entire record, we conclude that, during
the year at issue, Mr. Richards was engaged in his writing
activity with the requisite profit objective.
We first look to the manner in which Mr. Richards carried on
the activity. Mr. Richards managed some aspects of this activity
in a businesslike fashion. He hired agents to help him with
negotiating prices for the sale of his screenplays. Moreover,
Mr. Richards has a long professional history as a writer--and as
a successful writer. Mr. Richards has numerous contacts and
devotes much of his time and energy to carrying on this activity.
Mr. Richards did not have income from other sources, and
petitioners did not derive great tax benefits from the claimed
losses.
Although Mr. Richards’ efforts were not successful in
producing net profits for a number of years, this may be the
result of at least two factors: (1) The precarious nature of the
entertainment business, and (2) the claiming of expenses not
properly allocable to the writing activity. We do not believe
that the lack of unreported income in this situation negates the
presence of a profit objective. We hold that Mr. Richards was a
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