- 10 - Petitioner argues that he had an actual and honest objective to realize a profit from his mining activity during the years at issue, so his deductions with respect to his mining activity should not be limited by section 183. Respondent contends that an analysis of the relevant objective factors reveals that petitioner lacked a bona fide objective to make a profit. Applying the Factors 1. The Manner in Which Petitioner Conducted the Activity The fact that a taxpayer carries on the activity in a businesslike manner and maintains complete and accurate books and records may indicate that the activity is engaged in for profit. Sec. 1.183-2(b)(1), Income Tax Regs. Generally, if the activity in question is carried on in a manner substantially similar to other activities of the same nature that are profitable, a profit motive may be indicated. See Sullivan v. Commissioner, T.C. Memo. 1998-367, affd. without published opinion 202 F.3d 264 (5th Cir. 1999); sec. 1.183-2(b)(1), Income Tax Regs. Gold mining and other similar speculative activities are different from most other business activities because they generally produce no significant income until a find is made, and then the income is earned in one lump sum. In Harrison v. Commissioner, T.C. Memo. 1996-509, we found that a taxpayer’s contemporaneous handwritten lists of expenses were sufficient records for his gold mining andPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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