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whether JJT was conducted for profit and to that extent do not
help us “to understand the evidence or to determine a fact in
issue” within the meaning of rule 702 of the Federal Rules of
Evidence. Even if we were to grant respondent’s motion in toto,
however, we would find sufficient evidence elsewhere in the
record to sustain petitioner’s position that the subject activity
was conducted for profit. Accordingly, we conclude that
respondent’s motion in limine is moot.
Activity Engaged in for Profit Under Section 183(c)
The parties disagree as to whether petitioner engaged in his
Schedule C activity with an objective of making a profit within
the meaning of section 183. The parties have stipulated that if
petitioner did have the requisite profit objective, then the
expenses, cost of goods sold, and receipts as stated in
petitioner’s Schedules C for the years in issue are “true and
correct”, with exceptions not pertinent here.3
Under section 183(b)(2), if an individual engages in an
activity not for profit, deductions relating thereto are
allowable only to the extent gross income derived from the
activity exceeds deductions that would be allowable under section
183(b)(1) without regard to whether the activity constitutes a
3 Moreover, respondent has raised no issue as to whether, in
the event petitioner is found to have the requisite profit
objective for his Schedule C activity, any of the expenses in
question fail to constitute ordinary and necessary business
expenses within the meaning of sec. 162(a).
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Last modified: May 25, 2011