- 45 -
356, 358 (11th Cir. 1995), affg. in part and revg. in part T.C.
Memo. 1993-519; Zarins v. Commissioner, T.C. Memo. 2001-68.
While a reasonable expectation of profit is not required, the
objective facts and circumstances must indicate that the
taxpayer’s intent was to make a profit. Osteen v. Commissioner,
supra at 358. Whether a taxpayer is engaged in an activity for
profit is a question of fact to be resolved from all relevant
facts and circumstances. Hulter v. Commissioner, 91 T.C. 371,
393 (1988). In resolving this factual question, greater weight
is given to objective facts than to the taxpayer’s mere statement
of his intent. Siegel v. Commissioner, 78 T.C. 659, 699 (1982);
sec. 1.183-2(a), Income Tax Regs.
The regulations under section 183 contain a nonexclusive
list of nine objective factors to be taken into account when
deciding whether an activity is engaged in for profit. These
factors are: (1) The manner in which the taxpayer carries on the
activity; (2) the expertise of the taxpayer or his advisers; (3)
the time and effort expended by the taxpayer in carrying on the
activity; (4) the expectation that assets used in the activity
may appreciate in value; (5) the success of the taxpayer in
carrying on other similar or dissimilar activities; (6) the
taxpayer’s history of income or losses with respect to the
activity; (7) the amount of occasional profits, if any, which are
earned; (8) the financial status of the taxpayer; and (9) the
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011