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objective of making a profit and that the expenses incurred in
connection with the fishing activity were therefore deductible
only up to the amount of income earned from that activity.
As a result of respondent’s determination, petitioners were
allowed the standard deduction for 1993, which was larger than
the allowable activity limitation for that year, and were allowed
deductions of $19,788 and $23,679 for the 1994 and 1995 taxable
years, respectively.
Section 162(a) allows a taxpayer to deduct "all the ordinary
and necessary expenses paid or incurred * * * in carrying on any
trade or business". No deduction is allowed for family, living,
or personal expenses. See sec. 262(a).
If an individual engages in an activity without the
objective of making a profit, section 183 generally limits
allowable deductions attributable to the activity to the extent
of gross income generated by such activity. See sec. 183(b).
For a taxpayer to be engaged in a trade or business, the
taxpayer's primary purpose for engaging in the activity must be
for income or profit, and he must be involved in the activity
with continuity and regularity. See Commissioner v. Groetzinger,
480 U.S. 23, 35 (1987).
Whether or not a taxpayer is engaged in the activity for
profit depends on all the surrounding facts and circumstances of
the case. See Golanty v. Commissioner, 72 T.C. 411, 426 (1979),
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