-19-
Independent Elec. Supply, Inc. v. Commissioner, 781 F.2d 724, 726
(9th Cir. 1986), affg. Lahr v. Commissioner, T.C. Memo. 1984-472;
Engdahl v. Commissioner, 72 T.C. at 666; Churchman v.
Commissioner, 68 T.C. 696, 701 (1977). The burden of proof is on
petitioner. Rule 142(a); Independent Elec. Supply, Inc. v.
Commissioner, 781 F.2d at 727; Golanty v. Commissioner, 72 T.C.
at 426; Boyer v. Commissioner, 69 T.C. 521, 537 (1977).
In general, for these purposes the “profit” that must be
sought is taxable income, Independent Elec. Supply, Inc. v.
Commissioner, 781 F.2d at 726; Brannen v. Commissioner, 78 T.C.
471, 501 (1982), affd. 722 F.2d 695 (11th Cir. 1984), or economic
profit independent of tax savings. Antonides v. Commissioner, 91
T.C. 686, 694 (1988), affd. 893 F.2d 656, 659 (4th Cir. 1990).
Section 1.183-2(b)(1) through (9), Income Tax Regs., sets
out the following factors (principally derived from case law, see
Benz v. Commissioner, 63 T.C. 375, 382-383 (1974)), to be taken
into account in determining a profit objective, or lack of one:
(1) The manner in which the taxpayer carries on the activity; (2)
the expertise of the taxpayer or the taxpayer’s advisers; (3) the
time and effort spent 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
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