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taxpayer must show that he or she engaged in or carried on the
activity with an actual and honest objective of making a profit.
See Antonides v. Commissioner, 893 F.2d 656, 659 (4th Cir. 1990),
affg. 91 T.C. 686 (1988); Ronnen v. Commissioner, 90 T.C. 74, 91
(1988); sec. 1.183-2(a), Income Tax Regs. Although a reasonable
expectation of profit is not required, the taxpayer’s profit
objective must be bona fide. See Hulter v. Commissioner, 91 T.C.
371, 393 (1988); Beck v. Commissioner, 85 T.C. 557, 569 (1985).
“Profit” for purposes of section 183(a) means “economic profit,
independent of tax savings”. Ronnen v. Commissioner, supra at 92;
Hillman v. Commissioner, T.C. Memo. 1999-255.
Section 1.183-2(b), Income Tax Regs., sets forth a
nonexclusive list of factors to be considered in determining
whether an activity is engaged in for profit. These factors are:
(1) The manner in which the taxpayer carried on the activity; (2)
the expertise of the taxpayer or his advisers; (3) the time and
effort expended 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
losses with respect to the activity; (7) the amount of occasional
profits, if any, which are earned; (8) the financial status of the
taxpayer; and (9) whether elements of personal pleasure or
recreation are controlling. No single factor is necessarily
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