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petitioner’s mining activity expenses as set forth in his answer
was the same position asserted in the notices of deficiency;
i.e., the expenses must be disallowed because of section 183 or,
alternatively, because petitioner failed to establish they were
deductible under section 162.
Petitioner’s motion focuses on respondent’s litigating
position under section 183 with respect to respondent’s
disallowance of petitioner’s mining expense deductions.6 In his
response to petitioner’s motion, respondent asserts that he had a
reasonable basis in fact and law to disallow the deductions under
section 183. Although respondent also alleges that petitioner
fails to satisfy certain requirements of section 7430, we shall
confine our analysis to the section 183 issue because it disposes
of petitioner’s entire claim, making it unnecessary to address
other issues raised by respondent.
In Tinnell I, respondent determined that petitioner had not
engaged in his mining activity with the profit objective required
by section 183. Whether the requisite profit objective exists is
a question of fact that must be determined after considering all
the relevant facts and circumstances. Golanty v. Commissioner,
72 T.C. at 426.
6The sec. 162 issue was resolved by the parties prior to
trial.
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