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1 Our totals differ slightly from the totals on petitioners’
returns due to our rounding of the numbers. We also note that
there is a mathematical error in the return for tax year 1995.
Up to the time of trial, petitioner has not sold any of his
articles or novels. One article on the rocket industry was
published in a history book in 1997 without pay.
Petitioner reported no income from his writing activities.
Respondent contends that petitioner is not entitled to claim any
deductions because petitioner’s writing activity was not engaged
in for profit.
Section 183(a) generally provides that if an activity
engaged in by an individual is not entered into for profit, no
deduction attributable to the activity shall be allowed, except
as otherwise provided in section 183(b). Section 183(c)
provides: “For purposes of this section, the term ‘activity not
engaged in for profit’ means any activity other than one with
respect to which deductions are allowable for the taxable year
under section 162 or under paragraph (1) or (2) of section 212.”
“Profit” for purposes of section 183(a) means economic profit,
independent of tax savings. See Antonides v. Commissioner, 91
T.C. 686, 694 (1988), affd. 893 F.2d 656 (4th Cir. 1990); Hulter
v. Commissioner, 91 T.C. 371, 393 (1988).
Although a reasonable expectation of profit is not required,
the facts and circumstances must indicate that the taxpayer
entered into the activity or continued the activity with the
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