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Petitioner employed a mechanic on a contract labor basis to do
some of the work on the race car. During 1995 and 1996,
petitioner was retired/disabled and did not have any other
employment.
Petitioner's source of advice for the activity was industry
publications that provided ways of improving his race car to make
it more competitive. In addition, petitioner received advice
regarding improving his car from other drivers who had faster
race cars.
The only type of business or operating license required for
racing was a drag strip license (NHRA license), which petitioner
does have. However, because of petitioner's heart condition, his
NHRA license has speed restrictions which limit his ability to
drive his race car competitively. Because of the restrictions
placed on petitioner's NHRA license and his health condition, to
have any chance of winning "the money races", petitioner's son
has had to drive petitioner's car.
OPINION
Issue 1. Whether Petitioner's Automobile Drag Racing Activity
Was Engaged in With the Intent To Make a Profit
Section 162(a) allows deductions for all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business. In the case of an activity
not engaged in for profit, section 183 generally limits allowable
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