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under Rule 155 will be required to remedy the erroneous
adjustment made by respondent.7
The principal issue is whether petitioner's Baton Rouge
Volleyball Club activity was an activity not engaged in for
profit under section 183(a) for 1992 and 1993. Section 183(a)
provides generally that, if an activity is not engaged in for
profit, no deduction attributable to such activity shall be
allowed. Section 183(b)(1), however, provides that deductions
that are allowable without regard to whether the activity is
engaged in for profit shall be allowed. Section 183(b)(2)
further provides that deductions that would be allowable only if
the activity were engaged in for profit shall be allowed, "but
only to the extent that the gross income derived from such
activity for the taxable year exceeds the deductions allowable by
reason of" section 183(b)(1).
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." The Court's inquiry is
directed to whether the taxpayer engaged in the activity with the
7 In this instance, petitioner's income determined in the
notice of deficiency should be reduced by $1,956; i.e., $1,227
for the erroneous increase of income in the notice of deficiency
and $729 for the amount reported by petitioner on her 1993
return.
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