- 22 -
Accordingly, interest income in the amounts of $8,615,
$10,344, $10,321, and $10,293 is includable in petitioner’s
income for the 1987, 1988, 1989, and 1990 tax years,
respectively.
E. Net Loss Deductions for Farming and Harness-Racing Activities
Section 183(a) provides that if a taxpayer’s activity
constitutes an activity not engaged in for profit, expenses
arising out of the activity are allowed as deductions only as
provided in section 183(b). Section 183(c) defines an activity
not engaged in for profit as “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.”
The test for determining whether an individual is carrying
on a trade or business under section 183 is whether the
taxpayer’s actual and honest objective in engaging in the
activity is to make a profit. See Dreicer v. Commissioner, 78
T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205 (D.C.
Cir. 1983); sec. 1.183-2(a), Income Tax Regs.
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. The relevant
factors are: (1) The manner in which the taxpayer carries on the
activity; (2) the expertise of the taxpayer or his advisers; (3)
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