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listening to petitioner’s testimony, we are convinced that he had
an actual and honest objective of making a profit from his gold
mining activity. The evidence in this case simply does not
support any other conclusion. We hold that petitioners’ gold
mining activity during the years in issue was an activity engaged
in for profit within the meaning of section 183.
The parties have stipulated that petitioners actually
expended the amounts claimed as deductions on Schedules C of
their 1996 and 1997 tax returns. Respondent disputes whether the
amounts in question were expended for the claimed purposes.
Petitioner testified that he expended the funds in the amounts
and for the purposes listed on the tax returns. Respondent
cross-examined him without noticeable success. We consider
petitioner’s testimony on this subject credible. The deductions
claimed are reasonable. We sustain petitioners on this issue of
substantiation.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for petitioners.
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