Kenneth J. Nissley and Terri C. Connor Nissley - Page 11

                                               - 11 -                                                  

                  A major reason why many individuals remain committed to                              
            Amway is the congenial sense of family and the gratifying                                  
            motivational feeling that they derive from participating in the                            
                  Petitioners have “no intentions of getting out of * * *                              
                  Under section 183(a), if an activity is not engaged in for                           
            profit, then no deduction attributable to the activity shall be                            
            allowed except to the extent provided by section 183(b).  In                               
            pertinent part, section 183(b) allows deductions to the extent of                          
            gross income derived from an activity that is not engaged in for                           
                  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".  Deductions are allowable                            
            under section 162 or under section 212(1) or (2) if the taxpayer                           
            is engaged in the activity with the “actual and honest objective                           
            of making a profit”.  Ronnen v. Commissioner, 90 T.C. 74, 91                               
            (1988); Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd.                            
            without opinion 702 F.2d 1205 (D.C. Cir. 1983).                                            
                  The existence of the requisite profit objective is a                                 
            question of fact that must be decided on the basis of the entire                           

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Last modified: May 25, 2011