Ralph Louis Vitale, Jr. - Page 15




                                        -15-                                          
          Schedules C for the years in issue because "it has not been shown           
          that * * * [petitioner] either started a trade or business or               
          entered into an activity for profit. * * * [Nor has he] estab-              
          lished that any amount was for an ordinary and necessary business           
          expense".                                                                   
                                       OPINION                                        
               Section 162(a) generally allows a deduction for all ordinary           
          and necessary business expenses paid or incurred during the                 
          taxable year in carrying on any trade or business.  To be engaged           
          in a trade or business within the meaning of section 162, "the              
          taxpayer must be involved in the activity with continuity and               
          regularity and * * * the taxpayer's primary purpose for engaging            
          in the activity must be for income or profit."  Commissioner v.             
          Groetzinger, 480 U.S. 23, 35 (1987).                                        
               We are satisfied that petitioner's writing activity was                
          conducted with continuity and regularity during the years in                
          issue.  Nevertheless, in order for an activity to be considered a           
          trade or business within the meaning of section 162, a taxpayer             
          must conduct the activity with the requisite profit motive or               
          intent.  See id.                                                            
               Petitioner argues that he engaged in his writing activity              
          with the intent to make a profit and that his Schedule C expenses           
          for tax years 1993 and 1994 were ordinary and necessary to his              
          endeavor as an author.  Respondent does not dispute that amounts            






Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011