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or section 212(1) or (2) in the Court of Appeals for the Fourth
Circuit is whether the taxpayer engaged in the activity primarily
for the purpose of making a profit. See Hendricks v.
Commissioner, 32 F.3d 94, 97 n.6 (4th Cir. 1994), affg. T.C.
Memo. 1993-396. While a reasonable expectation of profit is not
required, a taxpayer’s profit objective must be bona fide. See
Hulter v. Commissioner, 91 T.C. 371 (1988). Whether a taxpayer
is primarily engaged in the activity for profit is a question of
fact to be resolved from all relevant facts and circumstances.
See id. at 393; Golanty v. Commissioner, 72 T.C. 411, 426 (1979),
affd. without published opinion 647 F.2d 170 (9th Cir. 1981). In
resolving this factual question, greater weight is given to
objective facts than to the taxpayer’s after-the-fact statements
of intent. See Siegel v. Commissioner, 78 T.C. 659, 699 (1982);
sec. 1.183-2(a), Income Tax Regs.
Thus, several factors are taken into consideration in
determining whether an activity is engaged in primarily for
profit under section 183. Generally, these factors, set out in
section 1.183-2(b), Income Tax Regs., include: (1) The manner in
which the activity is conducted, (2) the taxpayer’s expertise,
(3) the time and effort expended in the activity, (4) an
expectation that the assets used in the activity may appreciate
in value, (5) the success of the taxpayer in other similar or
dissimilar activities, (6) the history of income or losses of the
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