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accounts for transactions related to his private collection.
Raymond attended flea markets five or six times a week and
baseball card shows once or twice a month. He traded, bought,
and sold cards at the shows. Because he often used the money
from sales to purchase other items, Raymond erroneously believed
that he did not have taxable income from this activity. Thus,
petitioners did not report any income from sales related to
Raymond's private collection.
Petitioners next argue that they had no taxable income
because, applying factors set forth under section 183, Raymond
did not engage in the activity for profit. Petitioners
misinterpret section 183, for although that section limits the
amount a taxpayer may deduct from an activity if that activity is
not engaged in for profit, there is nothing in section 183 that
excludes from income profits earned from such activity.
B. Reduction of Gross Receipts for Cash Hoard
Respondent determined that petitioners had gross receipts
from Raymond's sports memorabilia activity, including the bulk
purchasing activity for the buyers group, totaling $455,584 in
1991 and $91,972 in 1992. Petitioners assert that respondent
should have reduced the amount each year to reflect money from a
cash hoard that Raymond deposited into the Ameritrust account.
Over the years, Raymond created a cash hoard primarily from
periodic sales of his memorabilia. He claims the cash hoard was
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